REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Negotiate and Execute an Agreement with Anixter Inc. for the Purchase of High-Voltage Circuit Breakers for Silicon Valley Power, for a Total Not-to-Exceed Compensation of $20,842,000 and Approve Related Budget Amendments
Report
BACKGROUND
The City of Santa Clara’s Electric Utility, Silicon Valley Power (SVP), has provided reliable electric service for over 129 years and continues to experience significant growth. To address both near-term and long-term impacts associated with load growth and aging infrastructure, SVP developed a City Council-approved Capital Improvement Strategy focused on maintaining system reliability and supporting future demand.
In addition to implementing this strategy, SVP manages ongoing maintenance projects and conducts annual long-term transmission planning studies to identify potential system constraints, including equipment overloads, and to maintain continued reliable power service. As part of this effort, SVP participates in the California Independent System Operator (CAISO) Transmission Planning Process (TPP), which evaluates system performance under projected load conditions.
Recent studies completed through the CAISO TPP indicate that 35 high-voltage circuit breakers rated at 63kA at the Northern Receiving Station (NRS) are forecasted to be overloaded under certain fault conditions by 2030. To mitigate these projected overloads, replacement of the affected circuit breakers will be required to increase the rating to 80kA. The currently estimated lead time for 80kA breakers is approximately 36 months. In order to meet upgrade timelines for 2030, procurement of circuit breakers is recommended now to accommodate long lead times.
SVP is currently upgrading and expanding the NRS and the new LS Power/230kV line Newark substation (NRS Upgrade Project). The NRS Upgrade Project was awarded to Henkels & McCoy, West, LLC (HMW) on July 8, 2025, (RTC 25-417) in the amount of $59,857,093.14. The City issued a notice to proceed on July 29, 2025, and so far, HMW has billed approximately $1.1 million dollars through October 2025 and is working towards submitting remaining invoices to catch up to present day.
The NRS Upgrade Project requires the purchase and replacement of high-voltage circuit breakers. The City initially purchased 63kA circuit breakers for the NRS Upgrade Project because they have shorter delivery timelines to align with SVP and LS Power’s energization schedule. Based on more recent studies, SVP has determined there is a need to procure 80kA circuit breakers to ensure system reliability in the long term. Therefore, these 80kA circuit breakers are best suited to meet the City’s needs. As for the 63kA circuit breakers (which have already been purchased and are not part of this 80kA procurement, SVP will put them to good use and be placed in its spare inventory to be used for future work and/or customer substations.
DISCUSSION
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 recommendation based on the lowest responsive and responsible bidder.
The RFB for the purchase of high-voltage circuit breakers was published on the City’s e-procurement system. A total of 55 companies viewed the RFB, and two bids were received from the following firms with the manufacturer they represent appearing in parentheses:
• Anixter, Inc. (Siemens)
• Morgan Ingland, LLC (Larson Electronic, LLC)
Upon initial evaluation, staff deemed Morgan Ingland, LLC’s bid non-responsive for not meeting the minimum qualifications in the RFB and for not being technically compliant.
Anixter, Inc.’s bid was responsive. Accordingly, staff recommend awarding an agreement to Anixter, Inc. (Anixter) as the lowest responsive and responsible bidder.
Staff request authorization to negotiate and execute an agreement with Anixter for the purchase of 35 high-voltage circuit breakers for a total not-to-exceed amount of $20,842,000, inclusive of estimated taxes and an approximately 20% contingency. The contingency includes allowances for potential tariff impacts, optional field support services, additional circuit breakers (if needed), and unanticipated system requirements.
The technical specifications for the high-voltage circuit breakers are attached for reference to describe the equipment being procured. The final agreement terms are currently under negotiation and will be finalized prior to execution.
A summary of equipment pricing and total compensation is provided in Table 1 below.
Table 1: High-Voltage Circuit Breakers Compensation Summary
|
Description |
Quantity |
Unit Cost |
Extended Cost |
|
High-Voltage Circuit Breakers, 145kV, 4000A, 80kA, 650kV BIL, SF6, dead tank, outdoor, free standing circuit breakers complete with bushings, operator, bushing current transformers, SF6 gas, etc., including the dynamic rating communication device monitors |
35 |
$454,592 |
$15,910,720 |
|
Spare bushing, trip coil, close coil, and motor |
4 |
N/A |
$4,775 |
|
Subtotal (Equipment Price) |
$15,915,495 |
|
Estimated Taxes (9.125%) |
$1,452,289 |
|
Contract Price |
$17,367,784 |
|
Contingency (~20%) |
$3,474,216 |
|
Maximum Total Compensation |
$20,842,000 |
Delivery is expected to occur by October 31, 2029. Payments will be based on the successful completion of key milestones, with at least 20% of the total contract value withheld until final acceptance of the high-voltage circuit breakers. A five-year warranty period covering parts and labor will commence upon final acceptance of each unit.
Additional quantities:
SVP may need to purchase additional high-voltage circuit breakers, 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. This section provides that the Purchasing Division Manager may purchase additional quantities after the initial award of a contract or purchase order for 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 the City Council, then City 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 the NRS Upgrade Project. This procurement does not require an additional environmental review of the NRS Upgrade Project.
FISCAL IMPACT
The total maximum authorization is $20,842,000 for the units noted in Table 1. Funding of $20.8 million is recommended to be appropriated in the Electric Utility Capital Fund this fiscal year to establish the NRS 80kA Breakers Replacement Project for procurement of the breakers. Funding of $20.8 million is available from the Electric Utility Fund Operations and Maintenance (O&M) Reserve. With the use of the O&M Reserve, the reserve level shall be decreased to $356.2 million, equivalent to approximately 196 days of operations, which exceeds the reserve target of 90 to 180 days.
Budget Amendment
FY 2025/26
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Electric Utility Fund (091) |
|
|
|
Transfers to |
|
|
|
|
Electric Utility Capital Fund |
$77,791,000 |
$20,842,000 |
$98,633,000 |
|
|
|
|
|
|
Ending Fund Balance |
|
|
|
|
Operations and Maintenance Reserve |
$377,000,000 |
($20,842,000) |
$356,158,000 |
|
|
|
|
|
|
|
|
|
|
Electric Utility Capital Fund (591) |
|
|
|
Transfers from |
|
|
|
|
Electric Utility Fund |
$77,791,000 |
$20,842,000 |
$98,633,000 |
|
|
|
|
|
|
Expenditures |
|
|
|
|
NRS 80kA Breakers Replacement Project (New Project) |
$0 |
$20,842,000 |
$20,842,000 |
Future year costs for installation of the breakers will be incorporated into the FY 2026/27 and FY 2027/28 Proposed Biennial Capital Improvement Program Budget as part of the annual budget process. Once the design is underway, the project costs will be refined, and budget amendments will be brought forward to the City Council as needed.
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
1. Authorize the City Manager or designee to negotiate and execute an agreement with Anixter, Inc. (Agreement) for the purchase of high-voltage circuit breakers, for approximately a three-year agreement term, plus a five-year warranty period, with a maximum compensation of $20,842,000, subject to the appropriation of funds and the review and approval as to form by the City Attorney;
2. Authorize the City Manager or designee to (a) take any actions as necessary to implement and administer the Agreement and associated purchase orders, and (b) negotiate and execute amendments to the Agreement for (i) additional circuit breaker procurements; (ii) address issues during the design and fabrication of the circuit breakers, and (iii) make de minimis changes, subject to the maximum compensation set forth above and the review and approval as to form by the City Attorney; and
3. Approve the following FY 2025/26 budget amendments:
a. In the Electric Utility Fund, increase the transfer to the Electric Utility Capital Fund and reduce the Operations and Maintenance Reserve Ending Fund Balance by $20,842,000 (five affirmative City Council votes required for the use of unused balances); and
b. In the Electric Utility Capital Fund, increase the transfer from the Electric Utility Fund and establish the NRS 80kA Breakers Replacement Project in the amount of $20,842,000 (five affirmative City Council votes required to appropriate additional revenue).
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Technical Specifications for High-Voltage Circuit Breakers