REPORT TO COUNCIL
SUBJECT
Title
Action on the Award of Purchase Orders to GE Grid Solutions, LLC for Purchase of Additional Equipment and Services for Silicon Valley Power’s GE JungleMux System
Report
COUNCIL PILLAR
Deliver and Enhance Quality Efficient Services and Infrastructure
BACKGROUND
On July 11, 2023, the City Council authorized the City Manager to issue purchase orders to GE Grid Solutions, LLC (GE) for the purchase of equipment, hardware, and software services for Silicon Valley Power’s GE JungleMux system with a total aggregate maximum amount for these purchases not to exceed $2,000,000 through June 30, 2028 (Attachment 1).
The purchase was approved on a sole source basis under Section 2.105.280(b)(2) of the City Code which states: “When required to ensure operation or function to match other products with respect to the repair, expansion or completion of a system, existing structure or program currently in use by the City, including, but not limited to, utility and technology purchases required to achieve interoperability with existing systems or programs.”
Silicon Valley Power (SVP) has been using the JungleMux communications multiplexer (JMUX) system manufactured by GE Grid Solutions, LLC (GE) for over 20 years. The JMUX system is a critical infrastructure system installed at SVP’s 32 substations. It supports the transmission of data to SVP’s control center from various applications, including electrical protection systems, supervisory control and data acquisition (SCADA) systems, video surveillance systems, and metering systems. Due to the proprietary nature of the equipment and software components, continued maintenance and system compatibility require purchases to be made directly from GE.
DISCUSSION
Since the City Council’s authorization in 2023, GE has announced that the JMUX system will be discontinued, with a last time to buy date of June 30, 2025. GE will offer limited technical support and repair services for up to seven years, through June 30, 2032.
In anticipation of this, SVP staff has procured critical spare components at a significant discount to support ongoing operations and maintenance. These purchases, totaling approximately $1.4 million, were made under the City Council’s previously authorized amount of $2,000,000. In addition, SVP has made other purchases such as equipment for new substations of approximately $400,000, leaving a remaining authorization of approximately $200,000 through June 30, 2028.
SVP currently has 36 operating JMUX nodes at 32 different substations and is constructing or modifying 15 JMUX nodes to meet projected electric load growth, primarily driven by the construction of new data centers and larger developments.
Going forward, additional funding is required to procure JMUX hardware and software from GE to support upcoming substation projects. Staff recommend the City Council authorize the City Manager to issue Purchase Orders to GE for an aggregate amount not to exceed $5 million (an increase of $3,000,000) through June 30, 2032. This increase is required to support upcoming substation projects and accounts for potential price increases due to current tariffs on imported goods.
Purchases will be governed by GE’s Terms and Conditions for Sale of Products and Services attached to this report. Prior to issuing each purchase order, staff will identify project-specific JMUX system needs and request a quote from GE. SVP staff will ensure pricing is fair and reasonable by comparing the quote to recent purchases. GE already provides a discount to SVP as a long-term customer.
When the purchase of equipment is part of commissioning a new substation, costs will be recovered from the requesting customer pursuant to a deposit or substation agreement.
Staff has been working on a long-term replacement for the JMUX system. Staff is developing an RFP that will include a pilot program to identify potential solutions that can be implemented in a phased approach in order to have minimal effect on SVP’s electrical system. Staff anticipates releasing the RFP in Q3 of 2025.
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 Regulations, because it can be seen with certainty that there is no possibility that the proposed action will have a significant effect on the environment given that it solely authorizes the purchase of additional software and hardware for existing infrastructure.
FISCAL IMPACT
Where purchase of the equipment is part of commissioning of a new substation, funding will be recovered from the requesting customer pursuant to a deposit agreement or substation agreement and included in the associated Capital Improvement Program Budget for that customer’s project. Equipment replacements associated with maintaining or expanding the system are included in SVP’s FY 2024/25 Operating or Capital Improvement Program Budget. Funding for future years will be included in the applicable 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.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to issue purchase orders to GE Grid Solutions, LLC on an as-needed basis for a period of five years through June 30, 2028, for a total maximum amount not to exceed $5,000,000 for the purchase of equipment, hardware, and software services for Silicon Valley Power’s GE JungleMux system, subject to the appropriation of funds and review and approval as to form by the City Attorney; and
2. Authorize the City Manager or designee to (a) take any actions as necessary to implement and administer GE’s Terms and Conditions for Sale of Products and Services and/or purchase orders, and (b) negotiate and execute amendments to the GE’s Terms and Conditions for Sale of Products and Services or purchase orders, to (1) add or delete services, (2) adjust future rates and terms based on market conditions, and (3) make de minimis revisions, subject to the above maximum compensation limit and review and approval as to form by the City Attorney.
Staff
Reviewed by: Nico Procos, Acting Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. GE Grid Solutions, LLC Terms and Conditions for Sale of Products and Services