REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Negotiate and Execute an Agreement with TRC Solutions, Inc. (TRC) for Electrification Rebates and Incentive Program Services for a Maximum Compensation Not to Exceed $2,935,500
Report
BACKGROUND
The City of Santa Clara (City) adopted its Climate Action Plan (CAP) on June 7, 2022, which articulates a comprehensive strategy for achieving carbon-neutrality by 2045. The CAP sets new targets for reaching aggressive emissions reductions across five main focus areas. One focus area is buildings and energy.
The City’s Electric Department, Silicon Valley Power (SVP), does not currently offer incentives for new residential construction. Incentives encourage developers to move towards all-electric buildings by reducing the additional costs associated with electrification. SVP has identified new construction electrification programs that will help to move the City towards its electrification goals, including programs that incentivize developers and encourage residents and businesses to exceed minimum construction requirements and fully embrace an all-electric building solution.
DISCUSSION
One of SVP’s goals is to advance residential and commercial electrification initiatives aimed at enhancing energy efficiency and achieving significant carbon reductions. To further this mission, SVP is proposing a new building electrification program designed specifically for multifamily housing and Accessory Dwelling Units (ADUs), which will encompass both new construction and retrofit projects. This initiative targets an estimated 5,000 new dwelling units and 500 retrofits. The program will incorporate comprehensive market research, data analysis, and the development of innovative technologies. It will also include the provision of technical and design support, assisting stakeholders in exploring emerging strategies and identifying pathways for greater savings. Engaging with developers will be a central aspect of the program, featuring tailored marketing campaigns, industry educational efforts, and proactive stakeholder relationship-building. Direct outreach will be employed to maximize participation, leveraging existing developer networks and databases to bolster involvement.
To implement this program, staff recommend executing an agreement with TRC Solutions, Inc. (TRC). Pursuant to Section 2.105.280(b)(4) of Santa Clara City Code, the Purchasing Division Manager has determined that this contract is exempt from competitive bidding as the proposed services are considered unique or unusual.
TRC is uniquely qualified to deliver these services. The firm has over 14 years of experience administering residential energy efficiency programs throughout California and currently holds a contract with the State of California to oversee statewide new residential construction programs operating within SVP’s service territory. In that role, TRC partners with the California Energy Commission and Pacific Gas & Electric. This statewide platform enables TRC to facilitate and layer multiple incentives from various sources through effective coordination of electrification programs, maximizing customer benefits while minimizing costs to SVP.
While TRC was identified as uniquely qualified for this engagement, the City issued a Request for Information (RFI), which was posted on the City’s e-procurement system. The purpose of the RFI was to notify the vendor community of the City’s intent to enter into a sole source agreement with TRC, state the justification for the sole source, and invite vendors to submit proposals that could meet the City’s requirements for the residential electrification program. There were no responses to the RFI, confirming that no other firms could meet the City’s needs and justifying the sole source procurement.
The proposed agreement with TRC has a term of five years, starting on or around October 15, 2025, and ending on or around October 14, 2030. The not-to-exceed maximum compensation is $2,935,500, which includes all services, expenses, and reimbursable costs authorized under the agreement. Compensation is structured as a mix of time-and materials billing and fixed-fee payments tied to specific program administration tasks. Hourly rates are set forth in the agreement and remain fixed for the first two years, with adjustments permitted in subsequent years subject to City approval. Certain program administration activities, such as invoicing, reporting, and scheduled meetings, will be billed on a fixed-fee basis, while other tasks including program launch, customer engagement, and project management will be billed on a time-and-materials basis.
Approval of the recommendation will authorize TRC to create and implement SVP’s incentive programs for multifamily housing and ADUs, which will encompass both new construction and retrofit projects from 2025 to 2030.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulation in that it can be seen with certainty that there is no possibility that the proposed actions may have a significant effect on the environment.
FISCAL IMPACT
The Agreement will be a five-year contract totaling $2,935,500. This has been benchmarked against similar programs at the Sacramento Municipal Utility District and Roseville Electric and has been deemed fair and reasonable. To account for changes that may arise during the contract, staff is requesting authorization for the City Manager to increase the maximum compensation by a 10% contingency, $300,000, subject to the appropriation of funds for a revised not to exceed amount of $3,235,500.
Funding for the program is budgeted in the Public Benefits Program in the Electric Operating Grant Trust Fund. If additional budget is required to appropriate for this program, it can be brought forward in a future budget action.
COORDINATION
This report has been coordinated with the Finance Department and 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
1. Authorize the City Manager or designee to execute an agreement with TRC Solutions, Inc. for Electrification Rebates and Incentive Program Services for an initial five-year term, starting on or around October 15, 2025, and ending on or around October 14, 2030, with a maximum compensation not to exceed $2,935,500 (funded by the Electric Operating Grant Trust Fund), subject to the appropriation of funds and review and approval as to form by the City Attorney; and
2. 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) add or delete services consistent with the Agreement’s scope of services, (b) adjust future rates based on market conditions, (c) increase the maximum compensation by up to $300,000 for a revised not to exceed amount of $3,235,500 over the full term of the Agreement, and (d) make de minimis modifications, subject to the appropriation of funds and 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. Agreement with TRC Solutions, Inc.