REPORT TO COUNCIL
SUBJECT
Title
Action on Authorizing the City Manager to Negotiate and Execute Agreement(s) with Vendor(s) for the Purchase of Control Enclosures with Protection and Control Panels and Neutral Grounding Resistors to be Funded by the Electric Utility Capital Fund
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
In November 2019, Silicon Valley Power (SVP) management met to discuss the strategic priorities for SVP and identified that the City of Santa Clara (City) would experience significant electric load growth requiring SVP to develop a capital improvement strategy. Staff determined the need for developing both near-term and long-term strategies to accommodate approved growth and develop the necessary infrastructure plan options.
On October 13, 2020, the City Council authorized the City Manager to execute master service agreements with several engineering consultant firms to support SVP with system expansion, general consulting services, and plan implementation services (RTC # 20-854).
On April 6, 2021, staff presented a comprehensive review of upcoming load growth and capital projects to the City Council as part of the SVP Quarterly Report. The presentation concluded with the next steps, including the preparation of a system growth strategy to be presented at a future City Council meeting.
On September 28, 2021, the City Council accepted SVP’s Three-Year System Growth Plan Strategy (RTC # 21-871). This plan identified $300 million in proposed projects for both near-term and long-term capital improvement projects needed to support anticipated system growth and to replace end-of life equipment for system reliability.
On April 5, 2022, the City Council adopted Resolution # 22-9069 adding new and updated connection and load development fees for SVP (RTC # 22-449). Additionally, on April 19, 2022, the City Council adopted Resolution # 22-9081 adopting the City of Santa Clara FY 2022/23 Municipal Fee Schedule, which included new and updated connection fees and load development fees, effective July 1, 2022 (RTC # 22-99). These fees were further updated for fiscal year 2023/24 by the adoption of Resolution 23-9221 on April 18, 2023, and for fiscal year 2024/25 by adoption of Resolution # 24-9316 on April 23, 2024. Such fees and their corresponding increases are intended to maintain fees at cost recovery levels necessary to support electric load growth.
On November 15, 2022 (RTC # 22-1172), the City Council accepted SVP’s System Expansion Plan for the California Independent System Operator’s (CAISO) Transmission Planning Process FY2023/24 (SVP System Expansion Plan CAISO TPP FY2023/24). The purpose of this process is to project SVP’s load growth over the next ten years and apply it to an electric system model to simulate load growth impacts on SVP’s electric system.
On May 9, 2023, the City Council adopted Resolution # 23-9223 regarding the City’s intent to issue tax-exempt electric system bonds for reimbursement of expenditures for certain capital improvement projects for SVP (RTC # 23-104), including load growth projects and associated equipment and material purchases.
On July 18, 2023, staff presented an update on these key near-term projects necessary for system growth to the City Council as part of the SVP Quarterly Report (RTC # 23-757). At the same meeting, the City Council approved amendments to several master service agreements, including increases to cumulative maximum compensation (RTC # 23-737).
As part of SVP’s ongoing efforts to support these City Council actions, system expansion and address load growth, a series of purchases have been made and are in progress to ensure that the necessary equipment and materials are delivered to meet project schedules. Significant purchases have already been authorized by the City Council as follows:
• On October 10, 2023, the City Council authorized the purchase of up to 12 high voltage transformers with a total not-to-exceed amount of $81,392,908 (RTC # 23-122).
• On May 7, 2024, the City Council authorized the purchase of up to 78 high voltage circuit breakers with a total not-to-exceed amount of $43,700,000 (RTC # 24-35).
• On May 28, 2024, the City Council authorized the purchase of high voltage disconnect switches, station service voltage transformers, voltage transformers and capacitive voltage transformers, and combination revenue metering transformers with a total not-to-exceed amount of $20,100,000 (RTC # 24-453).
This report now seeks authorization for the purchase of Control Enclosures with Protection and Control Panels and Neutral Grounding Resistors to be installed at the following locations:
• Northern Receiving Station (NRS) located on Stars and Stripes Drive.
• Kifer Receiving Station (KRS) located on Lafayette Street.
• Scott Receiving Station (SRS) located on Space Park Drive.
DISCUSSION
The following two procurements require expedited methods for acquiring critical equipment needed to meet the construction schedules of the expansion projects mentioned above. All procurements have adhered to or will adhere to the City’s purchasing policy, including formal notification through the City’s e-procurement system. The request to obtain City Council approval for these purchases is being made concurrently with the procurement process.
Control Enclosures with Protection and Control (P&C) Panels
Pursuant to Section 2.105.140(d) of the Santa Clara City Code (City Code), a formal Request for Bids (RFB) was conducted with the award to be based on the lowest responsive and responsible bidder(s).
On August 19, 2024, the City issued the RFB for Control Enclosures with P&C Panels which was published on the City’s e-procurement system. In addition, the City directly contacted several firms, to inform them of the RFB and directed interested firms to the e-procurement system. A total of 49 companies viewed the RFB, and three bids were received by the September 30, 2024, deadline from the following firms:
1. Avail Enclosure Systems
2. Crown Technical Systems
3. Schweitzer Engineering Laboratories
The bids are currently being evaluated by staff to verify their conformance to the RFB. Staff is seeking authorization for the City Manager to enter into an agreement with the vendor(s) submitting the lowest responsive and responsible bid(s).
Alternatively, staff seeks authorization for the City Manager to issue purchase orders or enter into an agreement with the vendors(s) based on award made pursuant to Section 2.105.200. If all three bids are deemed nonresponsive or non-responsible, the Purchasing Division Manager may reject all bids under Section 2.105.200 and direct staff to negotiate with the bidders and other suppliers in the open market. Section 2.105.200 authorizes this direct negotiation and specifically provides that “if all bids or proposals are rejected, the Purchasing Division Manager or designee may re-notice the solicitation or award without further complying with the provisions of this Chapter [Chapter 2.105 of the City Code] if readvertising is determined to be an idle act.”
The description and quantities are listed in Table 1.
Table 1: Control Enclosures with P&C Panels
|
Description |
KRS Qty |
SRS Qty |
Total QTY |
|
Control Enclosure (including cable tray, FACP, Lighting, receptacle, HVAC, Door with Electrical/Electronic locks, AC/DC battery, battery charger, battery monitor, Termination Cabinets, Communication Cabinets and AC/DC panel) |
1 |
1 |
2 |
|
115 kV P&C Panels |
13 |
9 |
22 |
|
115-60 kV Transformers |
5 |
5 |
10 |
|
60 kV P&C Panels |
13 |
12 |
25 |
|
Communication Panels |
4 |
4 |
8 |
|
RTU and SCADA |
2 |
2 |
4 |
Neutral Grounding Resistors
Pursuant to Section 2.105.140(d) of the City Code, an RFB was conducted with the award recommendation to be based on the lowest responsive and responsible bidder.
On September 20, 2024, the City issued a RFB for Neutral Grounding Resistors which was published on the City’s e-procurement system. In addition, the City directly contacted several firms to inform them of the RFB and directed interested firms to the e-procurement system. A total of 28 companies viewed the RFB, and 1 bid was received by the November 1, 2024, deadline from the following firm:
1. MegaResistors Corp.
The bid is currently being evaluated by staff to verify its conformance to the RFB. Staff is seeking authorization for the City Manager to enter into an agreement with the vendor(s) submitting the lowest responsive and responsible bid(s).
Alternatively, staff seeks authorization for the City Manager to enter into purchase orders or agreements with the vendors(s) based on award made pursuant to Section 2.105.200. If all bids are deemed nonresponsive or non-responsible, the Purchasing Division Manager may reject all bids under Section 2.105.200 and direct staff to negotiate with the bidders and other suppliers in the open market. Section 2.105.200 authorizes this direct negotiation and specifically provides that “if all bids or proposals are rejected, the Purchasing Division Manager or designee may re-notice the solicitation or award without further complying with the provisions of this Chapter [Chapter 2.105 of the City Code] if readvertising is determined to be an idle act.”
The description and quantities are listed in Table 2.
Table 2: Neutral Grounding Resistors
|
Neutral Grounding Resistors |
NRS Qty |
|
60kV Neutral Grounding Resistor with Bushings |
4 |
Summary
Subject to compliance with Chapter 2.105 of the City Code, staff is seeking authorization for the City Manager to negotiate and execute agreements and/or purchase orders for: (1) control enclosures with P&C panels, and (2) neutral grounding resistors, up to a total maximum aggregate amount of $13,000,000 inclusive of applicable taxes. The requested authorization is subject to review and approval as to form of all agreements and/or purchase orders by the City Attorney and appropriation of funds.
The majority of the total maximum aggregate amount is designated for the control enclosures with P&C panels, with the remaining funds allocated to the neutral grounding resistors.
Delivery Timeline
Deliveries are expected to take place between December 2025 and July 2026. Payments will be based on the successful completion of key milestones, including a minimum of 10% of the contract value after final acceptance of the varying equipment types.
A five-year warranty period is anticipated to cover parts and labor and will commence upon final acceptance of each unit.
Additional Quantities
As part of the expansion, SVP may need to purchase additional control enclosures and neutral grounding resistors, subject to the maximum compensation limit. If such purchases are necessary, they will be made pursuant to Section 2.105.130 of the City Code, which states “at the discretion of the Purchasing Division Manager, additional quantities may be purchased after the initial award of a contract or purchase order for general services or products. If the purchase of additional quantities or services increases the maximum compensation that exceeds the City Manager’s signature authority set forth in this chapter, or an amount previously approved by Council, then Council approval is required.”
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)(2) of Title 14 of the California Code of Regulations as the proposed actions solely involve the purchase of equipment for NRS, KRS, and SRS.
FISCAL IMPACT
The amount to be paid to the Vendor(s) under the Agreement(s) is not-to-exceed $13,000,000 for the initial quantity of units noted in Tables 1 and 2 and an additional $1,950,000 for a 15% contingency of the total contract value. Appropriations are available in the Electric Utility Capital Fund for the three receiving station rebuild and replacement projects - SRS, KRS, and NRS. On September 10, 2024, Council approved the issuance of electric revenue bonds which provide funding for the rebuild and replacement projects.
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. Subject to compliance with Chapter 2.105 of the City Code, review and approval as to form by the City Attorney, and appropriation of funds, authorize the City Manager or designee to negotiate and execute agreement(s) or purchase order(s) with vendors for Control Enclosures with Protection and Control Panels and Neutral Grounding Resistors listed below for a maximum compensation amount of $14,950,000; and
2. Authorize the City Manager or designee to (a) take any actions as necessary to implement and administer the agreement(s) and/or purchase order(s), and (b) negotiate and execute amendments to the agreement(s) for (i) design changes, (ii) any unanticipated issues, (iii) extensions of the term, or (iv) the purchase of additional Control Enclosures with Protection and Control Panels and Neutral Grounding Resistors, subject to the above maximum compensation limit 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