REPORT TO COUNCIL
SUBJECT
Title
Action on Delegation of Authority to the City Manager to Issue a Purchase Order to Trayer Engineering Corporation (Trayer) for Supervisory Control and Data Acquisition Controlled Vacuum Disconnect Interrupter Switchgear Associated with the Santa Clara University Distributed Energy Resources Project and Authorize the City Manager to Issue Future Purchases Orders to Trayer for Switchgear for Other Projects Up to a Maximum of $2,500,000 for Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance Quality Efficient Services and Infrastructure
BACKGROUND
Switchgear is a collection of electrical devices like switches, fuses, and circuit breakers designed to control, protect, and isolate electrical equipment within a power system by regulating the flow of electricity, preventing overloads, and automatically interrupting power in case of faults, essentially safeguarding connected devices from damage and ensuring safe operation. The City’s Electric Utility, Silicon Valley Power (SVP), uses switchgear for Distributed Energy Resources (DER) projects.
SVP is exploring projects such as renewable energy microgrids that use DERs to support critical city load and offset SVP peak loads. A DER system is a small-scale energy generation and storage technology that can be installed on-site to provide energy where it is needed. For example, microgrids currently being designed for Fire Station #2 and the Emergency Operations Center (EOC) will help protect the City’s most critical sites from experiencing operational downtime, increase electrical infrastructure resiliency, and reduce diesel generator run-times. Additionally, the daily operations and standby power from microgrids will reduce criteria pollutants and greenhouse gas (GHG) emissions, in alignment with the City’s Climate Action Plan (CAP).
In addition to projects supporting SVP and the City’s needs, SVP performs a number of services that are charged directly to its customers. The services are provided to meet their unique needs and include engineering studies for developer projects, upgrades to customer-dedicated substations, and installation of additional equipment for solar or battery storage projects. Customers pay SVP’s costs in advance through an agreement.
Santa Clara University (SCU) has requested that SVP perform upgrades necessary to accommodate their DER system. Their current system includes 900 KW of photovoltaic (PV) generation combined with a 1.53 MW Bloom fuel cell and 270 KW battery storage system. In addition to the existing PV and fuel cell capacity, SCU will interconnect and operate a new 1.3 MW PV system in parallel operation with SVP’s distribution system. This interconnection requires the procurement of a Supervisory Control and Data Acquisition (SCADA) controlled vacuum disconnect switchgear with protection and control elements which SVP proposes to purchase from Trayer Engineering Corporation (Trayer). This Trayer switch is the same switch as the one used on the City’s 12 kV distribution system with additional relays, control, and automation.
DISCUSSION
This is a sole source purchase authorized by the Purchasing Manager pursuant to section 2.105.280 (b)(2) of the Santa Clara City Code which states;”[W]hen required to ensure operation or function to match other products with respect to the repair, expansion or completion of a system, existing structure or program currently in use by the City, including, but not limited to, utility and technology purchases required to achieve interoperability with existing systems or programs”. The Purchasing Manager has determined that sole source procurement is justified in this case because the Trayer switch is required to ensure the operation of SVP’s systems. Trayer’s switch is already in use within the SVP’s infrastructure, and maintaining compatibility with existing equipment is critical to maintaining interoperability.
On July 27, 2023, the City executed a Deposit Agreement with SCU requiring SCU to deposit $519,612 for the costs to upgrade the SVP equipment. This amount includes equipment to be purchased from Trayer as well as staff costs for installing, testing, and commissioning the SCADA-controlled vacuum disconnect switchgear and related equipment. SCU has already submitted the deposit and the City will recover the costs of equipment and services from the deposit.
Staff requests delegation of authority to the City Manager to issue a purchase order to Trayer in an amount not to exceed $400,000 for the switchgear and associated equipment required for the SCU project.
Based on the same sole source justification, SVP is also seeking authorization for the City Manager to increase the total amount by $2,100,000 for an aggregate total amount of $2,500,000 through the period ending December 31, 2030. After December 31, 2030, SVP will evaluate and seek further authorization or take separate action if appropriate. This will allow SVP to address future requirements including microgrid project currently being designed for Fire Station #2 and the Emergency Operations Center (EOC). Any future purchases made on behalf of a customer will be recovered from the customer through deposit agreements and any additional funding needed would be brought forward to City Council in a budget amendment. This will allow SVP to both serve customers and take necessary actions to reduce impact on the electric grid.
ENVIRONMENTAL REVIEW
The approval of this action is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15378(b)(2) of Title 14 of the California Code of Regulations in that the proposed action solely involves the procurement of supplies.
FISCAL IMPACT
Funding for the initial purchase order will be paid by SCU and is included in the New Business Development Capital Project in the Electric Utility Capital Fund. Any future purchases made on behalf of customer will be recovered from the customer and any additional appropriations needed for purchases would be brought forward to Council in a budget amendment.
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>.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to issue a purchase order to Trayer Engineering Corporation for switchgear associated with the Santa Clara University project in the amount of $400,000, subject to the appropriation of funds and the review and approval as to form by the City Attorney; and
2. Authorize the City Manager or designee to issue purchase orders up to maximum additional amount of $2,100,000 to Trayer Engineering Corporation for switchgear needed for other projects within SVP’s service territory for a total aggregate authorization of $2,500,000 through December 31, 2030, 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