REPORT TO COUNCIL
SUBJECT
Title
Action on Authorizing the City Manager to Negotiate and Execute Amendment No. 3 to the Agreement with Electrical Consultants, Inc. for System Expansion Planning Services for Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
As discussed as part of Silicon Valley Power’s (SVP) regular Council updates, SVP’s electric load has increased by almost 50% over the last decade and is projected to continue significant growth over the next decade. In 2014, SVP recorded an annual instantaneous peak approximately equal to 485 Megawatts (MW) and in 2024, SVP recorded an annual instantaneous peak approximately equal to 722MW. Load growth will continue to increase in this manner as a result of new development. To assist with meeting future electric demand growth, SVP requires additional support and expertise from consultants to conduct ongoing detailed system planning.
Transmission Planning is conducted on an annual cycle consisting of short term and long-term capital improvement planning currently on a rolling 15-year horizon to accommodate the additional electric load growth. In 2020, after the City completed a Statement of Qualification (SOQ) process, the City Council authorized the City Manager to execute an agreement with Electrical Consultants, Inc. (ECI) to develop a System Expansion Plan with a maximum compensation of $850,000. In 2021, the City approved a first amendment to this agreement which, among other things, extended the term through December 31, 2023. On July 18, 2023, the City Council authorized the City Manager to negotiate and execute the second amendment to the Agreement with ECI to extend the term through December 31, 2025, and increase the maximum compensation from $850,000 to $1,500,000.
ECI supports SVP staff throughout the year to complete known recurring work assignments and special studies as they arise. Specifically, some examples of recurring work assignments are:
• Power Flow Model Development (Base Cases & Sensitivities)
• Load Flow Analysis (Base Case & Contingency Assessments)
• Steady-State Thermal and Voltage Analysis (Based on Reliability Criteria)
• System Operating Limit (SOL) Assessments
• Dynamic Device Response Assessments
• Reactive Power, Power Factor (PF), and Interconnection Agreement (IA) Assessments
• Facility Studies and Cost Estimates for Job Package Creation
• Short Circuit Duty (SCD) Model Development
• Bus Fault and Breaker Duty Studies
• SVP System Topology Update Support
• Dynamic Model and Study Criteria Development
• Transient Stability Analysis
• Geomagnetic Impact Studies
Some examples of past and current special as-needed studies are:
• Federal Grant Funding for Technical and Project Management Support
• SVP Equipment Specification and Facilities Design Input
• CAISO/PG&E Design Changes for SVP Load Serviceability and Projects
• Special Customer Studies for Facilities Load, Interconnection, and Generation
SVP’s Three-Year Growth Plan Strategy was accepted by the City Council on September 28, 2021 (RTC #21-871). On November 15, 2022 (RTC #22-1172), the City Council accepted SVP’s System Expansion Plan for the California Independent Operator’s (CAISO) Transmission Planning Process (TPP) FY2023/24 (SVP System Expansion Plan TPP FY2023/24).
Through SVP’s continual engagement in electric system planning and TPP processes with ECI’s support, CAISO has reassessed existing projects to address significant load growth in the greater South Bay including the City of Santa Clara such as:
1. Existing project modifications of the Newark to SVP’s Northern Receiving Station (NRS) from 500MW DC to 1000MW AC (November 2024 CAISO Board Approved).
2. New project proposal for an additional new 230kV 1000MW AC source from San Jose B to SVP’s NRS (Pending CAISO Board Approval in May 2025).
These ongoing planning efforts have been and continue to be instrumental in both near and long-term strategic projects serving the residents and businesses of the City. Each TPP will require detailed information and a technical basis for the completed analysis, including a summary of proposed projects. As system conditions and loads change, so do the project requirements which are presented to the City Council for approval where required.
DISCUSSION
SVP requires services from ECI to provide continuous support for the CAISO’s Annual TPP as well as other activities associated with system expansion planning such as:
• Support for the North American Electric Reliability Corporation (NERC) TPL-001-5 Transmission Planning Reliability Standards.
• Support for the Western Electricity Coordinating Council (WECC) Transmission Planner (TP), Transmission Owner (TO), Transmission Operator (TOP), Distribution Planner (DP), and Load Serving Entity (LSE) registration functions.
• General Planning Services and Project Estimates associated with the System Expansion Plan such as unanticipated design changes required by the CAISO.
Due to the additional load growth of SVP’s large customers and issues affecting SVP outside its service territory, staff identified additional necessary work such as:
• Engineering Support for Additional/Alternative Scenarios (includes design support, cost assessment, etc.).
• Additional Load Flow Analysis (for various load growth sensitivities).
• NRS/KRS/SRS Transformer Specification Review.
• 2nd SSS/NRS studies/BES TPP Dynamic Device Analysis/Cost Estimates/Contingency/Sensitivities (several special needs/time-sensitive studies).
As system conditions change, such as the significant load growth, studies and projects must be reassessed and require further analysis. It is critical for the City to have the technical expertise to support SVP staff activities and remain fully engaged throughout these ongoing planning processes, as failure to participate may result in negative consequences for SVP’s load serviceability and SVP customers.
As mentioned previously, the TPP is conducted on an annual rolling basis; therefore, there is an ongoing need to assess and deliver comments to the CAISO and other stakeholders regarding its recent system expansion, such as design changes to the existing LS Power Line and also the potential new proposed 230kV AC transmission line. These design changes were enacted by the CAISO to address the long-term need for additional capacity in the South Bay and represent significant design changes that also impact ongoing SVP projects. Without the rapid response of SVP staff and availability of ongoing technical support from external firms such as ECI, both internal and external project delays could result, significantly affecting SVP’s near and long-term load serviceability.
Similar to a number of master agreements managed by SVP, staff will incorporate a work authorization process to authorize specific tasks in advance. When a specific project is identified, SVP will request a proposal from ECI and issue a work authorization or a purchase order for the services. SVP will review the proposed costs to ensure their reasonableness. This will provide flexibility to quickly respond to emergent issues while managing the agreement’s maximum compensation.
Staff requests that the City Council authorize the City Manager to negotiate and execute the third amendment to the agreement with ECI extending the term of the agreement through December 31, 2030, and increasing the maximum compensation by $1,500,000 to a new total maximum compensation of $3,000,000.
ENVIRONMENTAL REVIEW
The actions being considered do 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 Regulations in that it can be seen with certainty that there is no possibility that the proposed consulting services will have a significant effect on the environment.
FISCAL IMPACT
The total cost of the proposed agreement with Electrical Consultants, Inc. (ECI) to perform work on the System Expansion Plan shall not exceed $3,000,000. Funding for this agreement is included as part of the Adopted Biennial FY 2024/25 and 2025/26 Capital Improvement Program Budget in the New Business Estimate Work CIP project in the Electric Utility Capital Fund.
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.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to negotiate and execute Amendment No. 3 to the Agreement with Electrical Consultants, Inc. for System Expansion Planning to extend the term through December 31, 2030, and increase the maximum compensation by $1,500,000 for a total compensation amount not to exceed $3,000,000, subject to the review and approval as to form by City Attorney; and
2. Authorize the City Manager or designee to take any necessary actions to implement and administer the Agreement and to negotiate and execute amendments to the agreement to add or delete services consistent with the scope of services, subject to no price increases, the appropriation of funds, and the review and approval as to form by City Attorney.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager
ATTACHMENT
1. Agreement with Electrical Consultants, Inc
2. Amendment No. 1 to Agreement with Electrical Consultants, Inc
3. Amendment No. 2 to Agreement with Electrical Consultants, Inc