REPORT TO COUNCIL
SUBJECT
Title
Action on Authorizing the City Manager to Negotiate and Execute Amendments to the Agreement for Services with AECOM Technical Services, Inc. for Renewable Microgrid Feasibility Study and Design Services
Report
COUNCIL PILLAR
Promote Sustainability and Environmental Protection
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
In May 2021, after a Request for Proposals (RFP) process, the City Council (RTC# 21-442) authorized the City Manager to execute an agreement with AECOM Technical Services, Inc. (AECOM) to conduct a feasibility study and provide design services for renewable energy microgrids.
Renewable energy microgrids are a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that act as a single controllable entity, which can serve its own load independent of an electric utility’s grid. A microgrid can connect and disconnect from an electric utility’s grid to enable it to operate in both grid-connected or island mode utilizing solar photovoltaic and energy storage systems.
The implementation of microgrids may help protect the City of Santa Clara’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 pollutants and greenhouse gas (GHG) emissions, supporting the City’s Climate Action Plan.
As part of a feasibility study, AECOM evaluated two candidate Santa Clara fire stations for potential microgrid deployment. AECOM recommended Fire Station #2 as the most suitable site. Because of this fire station’s location, a microgrid also has the potential to benefit the adjacent Santa Clara Emergency Operations Center (EOC). Integrating the EOC into the Fire Station #2 microgrid would increase the photovoltaic solar system from 150 kW AC (Alternating Current) to approximately 300kW AC and increase the Battery Energy Storage System (BESS) from 180 kW (2hr) to 2,000 kW (4hr).
From an economic perspective, both sites would result in capital cost savings as they would share the same BESS and microgrid switchgear. Because of these advantages, design changes beyond the initial feasibility study were recommended and included in the design to develop the community microgrid concept between the two sites.
DISCUSSION
The Fire Station #2/EOC Microgrid Project (Project) has the potential to provide a variety of benefits, which make the further development of the design worth continued efforts. As mentioned, microgrids can assist with local and statewide (CAISO) grid decarbonization, grid resiliency and reliability, and support for both critical and non-critical site loads. In addition, a microgrid project like this Project can help the development of utility microgrid standards. This could accelerate the integration of these technologies into the as-built environment through the production of a standardized set of equipment and controls. Also, microgrid projects serve as a real-world model for municipalities and other developers pursuing similar projects, as a component of the statewide roadmap for decarbonization and as an accessible solution to address grid resiliency and reliability.
AECOM has completed approximately 60% of the Project design. The proposed design will include battery energy storage, photovoltaic (PV), and electric vehicle (EV) charging infrastructure. Silicon Valley Power (SVP) paused AECOM’s services at this stage to address additional service needs.
Upon completion of the design, SVP will evaluate whether to proceed with the project and, if so, will put the Project out to bid. Prior to any City Council action to move forward with the construction of the Project, additional environmental review will be conducted.
The original agreement included a fixed amount of $261,564 to complete the feasibility study and preliminary design, plus up to $200,000 for additional services, for a maximum compensation amount of $461,564. Of the $200,000, $89,422 was authorized for subcontractor changes resulting from delays due to staffing changes at SVP, structural assessment of the fire station, and design modifications, including the addition of the EOC to the Project and the increase in size of the photovoltaic system and battery.
Additional funds are required for AECOM to complete the design for the expanded project and support any environmental review. If the City Council proceeds with the construction of the Project, staff recommends that the City use the remaining funds to support construction of the Project, including permit coordination, bid support, and engineering support during project construction.
For those services authorized, AECOM will provide all services according to a work authorization process specified in the Agreement, staff recommends authorizing funding of $279,522 (approximately 28% of the total project costs of $1 million) to cover additional service needs, especially in the event that the City Council authorizes construction of the Project. As a result, the total maximum compensation would increase by $538,436 from $461,564 to $1,000,000, with costs estimated as outlined in Table 1 below.
Table 1: Revised Maximum Compensation
|
Description |
Amount |
|
Original Scope |
|
Feasibility Study and Preliminary Design |
$261,564 |
|
Change Orders Issued to Date |
$89,422 |
|
New Scope - Expanded Project |
|
Complete Design |
$163,322 |
|
If Project Authorized for Construction |
|
Permitting |
$30,850 |
|
Bid and Award Support Services |
$19,600 |
|
Engineering Support During Construction |
$155,720 |
|
Subtotal |
$720,478 |
|
Contingency/Additional Services |
$279,522 |
|
Revised Maximum Compensation |
$1,000,000 |
Staff recommend an initial extension to the term for two years through April 30, 2027. Staff also requests authorization for the City Manager to negotiate and execute amendments to extend the term of the Agreement for up to an additional two years through April 30, 2029, if needed.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of a California Environmental Quality Act (“CEQA”) pursuant to 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 design services and other services may have a significant effect on the environment. If the City decides to construct the Project, additional environmental review will be required.
FISCAL IMPACT
Sufficient funding was appropriated from the Electric Department Public Benefits Program to the Electric Utility Capital Fund for the Renewable Energy Microgrid project, CIP 2446. Funding for future years, if needed, will be requested as part of the annual budget process.
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 amendment to the agreement with AECOM Technical Services, Inc. (Agreement) for renewable energy microgrid feasibility study and design services to expand the contract scope to include the City’s Emergency Operations Center and to increase the maximum compensation by $538,436 from $461,564 to $1,000,000 and extend the term by two years through April 30, 2027, subject to the review and approval as to form by the City Attorney; and
2. Authorize the City Manager or designee to take any actions as necessary to implement and administer the amended Agreement and negotiate and execute future amendment(s) to (a) add or delete services associated with the project, (b) adjust future rates based on market conditions, (c) make de minimis changes, and (d) extend the term up to an additional two years, subject to the appropriation of funds and the 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
ATTACHMENT
1. AECOM Technical Services, Inc. Agreement for Service
2. AECOM Technical Services, Inc. Amendment No. 1 to the Agreement for Services
3. AECOM Technical Services, Inc. Amendment No. 2 to the Agreement for Services