REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager to Negotiate and Execute Amendment No. 2 to the Agreement for Distributed Control System Upgrade/Replacement Project with Emerson Process Management Power and Water Solutions
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara's Electric Utility, Silicon Valley Power (SVP), operates three power generation facilities within city limits: the Donald Von Raesfeld Power Plant (DVR), the City of Santa Clara Cogen, and the Gianera Generating Station (Gianera). The DVR facility is the main plant and is a 2x1 combined cycle power plant rated at 147 Megawatts of electrical power.
In 2019, a Request for Proposals (RFP) was issued to replace the control systems at DVR because the existing control systems were at end of life. After evaluation of all submitted proposals, a contract was awarded to Emerson to replace the distributed control system at DVR. A control system is a critical component of a power plant providing for operator interface and distributed control of turbine, generator, and Balance of Plant (BOP) functions including startup, shutdown, protection, and monitoring.
The agreement with Emerson included provision for hardware components necessary for the control system to function, including but not limited to controllers, cabinets, communication network hardware, related hardware, labor for configuration, training, support, and third-party software. The project was completed in June 2020.
In 2020, Council approved Amendment No. 1 which included: implementation of Emerson's Ovation software and the Ovation Excitation System, replacement of the Automatic Voltage Regulators (AVR) for all three generators with new equipment at DVR, and regulatory testing and modeling required by the North American Electric Reliability Corporation (NERC) and Western Electric Coordinating Council (WECC) Electric Reliability Standards.
DISCUSSION
A complete control system retrofit at Gianera and replacement of remaining legacy control equipment at DVR are both required to ensure the reliable operation of Generation facilities and maintain regulatory compliance with the interconnect requirements of NERC, WECC, and the California Independent System Operator (CAISO). Extending and upgrading the control system already installed at DVR provides several benefits including: the ability to monitor Gianera from DVR, a single data historian for troubleshooting of plant issues and outages, a single platform for staff training and knowledge base, and economies of scale associated with purchases of parts where needed.
The proposed Amendment No. 2 will increase the maximum compensation of the agreement with Emersion by $8,275,000 from $3,725,000 to $12,000,000. This includes funding for projects that will be authorized using a Work Authorization process included in the amended Agreement as well as funding for annual support and maintenance.
Upcoming projects include:
• An expansion of existing Ovation systems that will complete the control system for BOP at DVR, including gas compressors, duct burners, water treatment and chiller systems. These systems will be fully integrated with the current DVR Ovation control system including the latest hardware.
• Upgrading the control system at the Gianera facility to an Ovation control system which will be integrated with the DVR control system. This upgrade will include enhanced protection in the form of electronic overspeed protection, excitation control systems, and upgraded relay protection systems. This upgrade is required for the facility to be compliant with NERC regulations.
• A planned system wide update of hardware and software from Ovation version 3.7 to version 3.8. This update will not take place before fiscal year 2026.
Upon completion of the above projects, all major control systems for DVR and Gianera will have been converted to the latest Ovation standard. The completion of the above projects will provide for a singular distributed-control network between DVR and Gianera, leveraging best-in-class technology and enabling both maintenance and future system updates to be completed efficiently.
In addition to the proposed increase in compensation incorporated into Amendment No. 2, staff recommends that the City Manager is authorized to negotiate and execute additional amendments as needed to include unanticipated projects up to a maximum compensation not to exceed $15,000,000. Due to the rapidly changing electric utility marketplace and regulations, there may be a need for additional projects that are not known at this time. For some projects, the City is required to authorize and schedule a project over one year in advance while also accommodating system outages to avoid peak usage periods. Authorizing additional funds at the time of this action will permit SVP to respond rapidly to balance those concerns.
ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the actions being considered are exempt from the California Environmental Quality Act (“CEQA”) pursuant to section 15301 of Title 14 of the California Code of Regulations as the services involve a retrofit of existing hardware and software upgrade for existing facilities.
FISCAL IMPACT
The proposed Amendment No. 2 increases the maximum compensation by $8,275,000 from $3,725,000 to $12,000,000 for the period of July 1, 2019, through December 31, 2030, subject to the appropriation of funds. The City Manager would also be authorized to negotiate and execute additional amendments up to a maximum compensation of $15,000,000, subject to the appropriation of funds.
Sufficient funds are available to initiate the near-term projects at DVR and Gianera in the Electric Utility Capital Fund in the Replace Balance of Plant Control System (DCS) project, CIP 2434. Funding for the annual support costs in future agreement years are available in the Operating Electric Utility Fund. Additional funds will be required in future years which will be requested through the corresponding budget process.
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 <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
1. Determine the proposed actions are exempt from CEQA pursuant to Section 15301 of Title 14 of the California Code of Regulations;
2. Authorize the City Manager to negotiate and execute Amendment No. 2 to the Agreement for Distributed Control System Upgrade/Replacement Project with Emerson Process Management Power and Water Solutions increasing maximum compensation by $8,275,000 from $3,725,000 to $12,000,000 and extending the term through December 31, 2030;
3. Authorize the City Manager to negotiate and execute additional amendments as needed to (a) add or delete services consistent with the scope of services for the agreement, (b) adjust future rates, and (c) increase maximum compensation to a not to exceed amount of $15,000,000, subject to the appropriation of funds; and
4. Authorize the City Manager to take any actions as necessary to implement and administer the agreement.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Office of the City Manager
ATTACHMENTS
1. Original Agreement
2. Amendment No. 1