REPORT TO COUNCIL
SUBJECT
Title
Action Authorizing the City Manager to Negotiate and Execute Agreements and/or Purchase Orders with Vendors for the Purchase of Steel Structures to be Funded by the Electric Utility Capital Fund
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
In November 2019, Silicon Valley Power (SVP) management met to discuss SVP’s strategic priorities and identified that the City of Santa Clara (City) would experience significant electric load growth requiring SVP to develop a capital improvement strategy. Staff determined the need for developing both near-term and long-term strategies to accommodate approved growth and develop the necessary infrastructure plan options.
On October 13, 2020, the City Council authorized the City Manager to execute master service agreements with several engineering consultant firms to support SVP with system expansion, general consulting services, and plan implementation services (RTC #20-854).
On April 6, 2021, staff presented a comprehensive review of upcoming load growth and capital projects to the City Council as part of the SVP Quarterly Report. The presentation concluded with the next steps, including the preparation of a system growth strategy to be presented at a future City Council meeting.
On September 28, 2021, the City Council accepted SVP’s Three-Year System Growth Plan Strategy (RTC #21-871). This plan identified $300 million in proposed projects for both near-term and long-term capital improvement projects needed to support anticipated system growth and to replace end-of life equipment for system reliability.
On April 5, 2022, the City Council adopted Resolution #22-9069, adding new and updated connection and load development fees for SVP (RTC #22-449). Additionally, on April 19, 2022, the City Council adopted Resolution #22-9081, adopting the City of Santa Clara fiscal year 2022/23 Municipal Fee Schedule, which included new and updated connection fees and load development fees, effective July 1, 2022 (RTC # 22-99). These fees were further updated for fiscal year 2023/24 by the adoption of Resolution #23-9221 on April 18, 2023, and for fiscal year 2024/25 by adoption of Resolution #24-9316 on April 23, 2024. Such fees and their corresponding increases are intended to maintain fees at cost recovery levels necessary to support electric load growth.
On November 15, 2022 (RTC #22-1172), the City Council accepted SVP’s System Expansion Plan for the California Independent System Operator’s Transmission Planning Process FY2023/24 (SVP System Expansion Plan CAISO TPP FY2023/24). The purpose of this process is to project SVP’s load growth over the next ten years and apply it to an electric system model to simulate load growth impacts on SVP’s electric system.
On May 9, 2023, the City Council adopted Resolution #23-9223, regarding the City’s intent to issue tax-exempt electric system bonds for reimbursement of expenditures for certain capital improvement projects for SVP (RTC #23-104), including load growth projects and associated equipment and material purchases.
On July 18, 2023, staff presented an update to the City Council on these key near-term projects necessary for system growth as part of the SVP Quarterly Report (RTC #23-757). At the same meeting, the City Council approved amendments to several master service agreements, including increases to cumulative maximum compensation (RTC #23-737).
On September 10, 2024, the City Council approved the issuance of electric revenue bonds, which provide funding for the large System Expansion Plan projects (RTC #24-46).
As part of SVP’s ongoing efforts to support these City Council actions, system expansion, and address load growth, a series of purchases have been made and are in progress to ensure that the necessary equipment and materials are delivered to meet project schedules. Significant purchases have already been authorized by the City Council as follows:
• On October 10, 2023, the City Council authorized the purchase of up to 12 high voltage transformers with a total not-to-exceed amount of $81,392,908 (RTC #23-122).
• On May 7, 2024, the City Council authorized the purchase of up to 78 high voltage circuit breakers with a total not-to-exceed amount of $43,700,000 (RTC #24-35).
• On May 28, 2024, the City Council authorized the purchase of high voltage disconnect switches, station service voltage transformers, voltage transformers and capacitive voltage transformers, and combination revenue metering transformers with a total not-to-exceed amount of $20,100,000 (RTC #24-453).
• On November 12, 2024, the City Council authorized the purchase of control enclosures with protection and control panels and neutral grounding resistors with a total not-to-exceed amount of $14,950,000 (RTC #24-1056).
• On November 19, 2024, the City Council authorized the purchase of Capacitor Banks with Reactive Switching Devices, Protection and Control Panels, Insulators, and Surge Arresters with a total not-to-exceed amount of $12,650,000 (RTC #24-1057).
DISCUSSION
In alignment with the City Council actions outlined above, staff is now seeking approval to negotiate and execute agreements and/or purchase orders for the purchase of steel structures for the Northern Receiving Station (NRS), Kifer Receiving Station (KRS), and Scott Receiving Station (SRS) projects.
Steel Structures for the NRS Project
On February 5, 2025, staff issued a Request for Bid (RFB) for steel structures for the NRS project, which was published on the City’s e-procurement system. In addition, the City contacted several firms directly, informing them of the RFB and directing them to the e-procurement system if interested. Two bids were received by the deadline of March 19, 2025. Both bids were determined to be responsive and are now under technical review by SVP staff.
Steel Structures for the SRS and KRS Projects
Although the formal bidding process has not yet been initiated for the SRS and KRS steel structures, staff is requesting authorization now to expedite the process in order to meet project schedules. The RFB was published on March 19, 2025, and bids are due April 4, 2025.
Procurement Process
City staff intends to award the procurement of steel structures in accordance with Section 2.105.140(d) of the Santa Clara City Code (City Code). Under this section, the City may only award to the lowest responsive and responsible bidder who meets all the material specifications. In the event that bids are deemed non-responsive or non-responsible, Section 2.105.200 of the City Code authorizes the Purchasing Division Manager to reject all bids and, if appropriate, either re-notice the bid or directly negotiate with vendors on the open market without further notice. Staff will work with the Purchasing Division Manager to ensure any decision to forgo readvertising is in compliance with Section 2.105.200. Additionally, if no bids are received, Section 2.105.220 of the City Code provides similar authority to acquire the equipment on the open market or to re-notice the solicitation.
Description and Quantities
The following table outlines the specific items and quantities required for the procurement of Steel Structures to support SVP’s expansion projects:
|
Table 1: NRS Steel Structures |
NRS Qty |
|
A1 - 60kV Structural Steel, Vert. Break-Switch Stand (HVS) (NRS-S-0-X-40) |
9 |
|
A4 - 60kV Structural Steel, Potential Transformer Stand, Single Phase (NRS-S-0-X-55) |
28 |
|
ASTM F1554 Anchor Bolts for Switch Stand - 1 1/4" Diameter, 4' Length |
72 |
|
ASTM F1554 Anchor Bolts for Pt Stand - 1" Diameter, 3' Length |
336 |
|
B1 - 115kV Structural Steel, High Vert. Brake Switch Stand (NRS-S-0-X-42) |
21 |
|
B2 - 115kV Structural Steel, Low Vert. Brake Switch Stand (NRS-S-0-X-41) |
2 |
|
B3 - 115kV Structural Steel, Low Bus Support, Three-Phase, Diagonal (NRS-S-0-X-46) |
13 |
|
B3A - 115kV Structural Steel, Low Bus Support, Three-Phase, Perpendicular (NRS-S-0-X-43) |
4 |
|
B4 - 115kV Structural Steel, 1 Phase CVT Support Stand (NRS-S-0-X-54) |
35 |
|
B5 - 115kV Structural Steel, High Bus Support, Three-Phase, Perpendicular (NRS-S-0-X-47) |
1 |
|
ASTM F1554 Anchor Bolts for High Switch Stand - 1 1/4" Diameter, 4'-6" Length |
168 |
|
ASTM F1554 Anchor Bolts for Low Switch Stand - 1 1/4" Diameter, 3'-6" Length |
16 |
|
ASTM F1554 Anchor Bolts for Low Bus Support - Diagonal - 1" Diameter, 3'-6" Length |
104 |
|
ASTM F1554 Anchor Bolts for Low Bus Support - Perpendicular - 1" Diameter, 3'-6" Length |
32 |
|
ASTM F1554 Anchor Bolts for CVT Support Stand - 1" Diameter, 3' Length |
420 |
|
ASTM F1554 Anchor Bolts for High Bus Support - Perpendicular - 1" Diameter, 3'-6" Length |
8 |
|
D - 230kV Structural Steel, 3 Phase, Low Switch Support Stand (NRS-S-0-X-38) |
17 |
|
E - 230kV Structural Steel, 1 Phase, Low Bus Support (NRS-S-0-X-48) |
18 |
|
F - 230kV Structural Steel, 1 Phase, High Bus Support Stand (NRS-S-0-X-49) |
18 |
|
G1 - 230kV Structural Steel, CCVT Support Stand (NRS-S-0-X-39) |
9 |
|
ASTM F1554 Anchor Bolts for Switch Support Stand - 1" Diameter, 4' Length |
136 |
|
ASTM F1554 Anchor Bolts for Low Bus Support - 1 1/2" Diameter, 4'-6" Length |
216 |
|
ASTM F1554 Anchor Bolts for High Bus Support - 1 1/2" Diameter, 4'-6" Length |
216 |
|
ASTM F1554 Anchor Bolts for CCVT Support Stand - 3/4" Diameter, 2' Length |
108 |
|
Table 2: KRS Steel Structures |
KRS Qty |
|
115kV Three Phase Low Bus Support Structure (Bs1) |
13 |
|
ASTM F1554 Grade 105 Anchor Bolts (1" Diameter, 3' Length) for BS1 |
52 |
|
115kV Single Phase Low Bus Support Structure (BS2) |
25 |
|
ASTM F1554 Grade 105 Anchor Bolts (1-1/4" Diameter, 3'-6" Length) for BS2 |
100 |
|
115kV Three Phase High Bus Support Structure (BS3) |
8 |
|
ASTM F1554 Grade 105 Anchor Bolts (1-1/4" Diameter, 3'-6" Length) for BS3 |
32 |
|
115kV Three Phase CVT Support Structure (CVT1) |
8 |
|
ASTM F1554 Grade 105 Anchor Bolts (1" Diameter, 3' Length) for CVT1 |
64 |
|
115kV Three Phase Metering Unit Support Structure (Mu1) |
2 |
|
ASTM F1554 Grade 105 Anchor Bolts (1" Diameter, 3' Length) for MU1 |
16 |
|
115kV Three Phase Low Switch Support Structure (SW1) |
20 |
|
ASTM F1554 Grade 105 Anchor Bolts (1" Diameter, 3' Length) for SW4 |
160 |
|
Table 3: SRS Steel Structures |
SRS Qty |
|
115kV Three Phase Low Bus Support Structure (Bs1) |
14 |
|
ASTM F1554 Grade 105 Anchor Bolts (1" Diameter, 3' Length) for BS1 |
56 |
|
115kV Single Phase Low Bus Support Structure (Bs2) |
20 |
|
ASTM F1554 Grade 105 Anchor Bolts (1-1/4" Diameter, 3'-6" Length) for BS2 |
80 |
|
115kV Three Phase High Bus Support Structure (Bs3) |
9 |
|
ASTM F1554 Grade 105 Anchor Bolts (1-1/4" Diameter, 3'-6" Length) for BS3 |
36 |
|
115kV Three Phase CVT Support Structure (CVT1) |
7 |
|
ASTM F1554 Grade 105 Anchor Bolts (1" Diameter, 3' Length) for CVT1 |
56 |
|
115kV Three Phase Low Switch Support Structure (SW1) |
17 |
|
ASTM F1554 Grade 105 Anchor Bolts (1" Diameter, 3' Length) For SW1 |
136 |
|
115kV Three Phase Low Switch Support Structure (SW4) |
1 |
|
ASTM F1554 Grade 105 Anchor Bolts (1" Diameter, 3' Length) For SW4 |
8 |
Summary
Subject to compliance with Chapter 2.105 of the City Code, staff is seeking authorization for the City Manager to negotiate and execute agreements and/or purchase orders for steel structures, up to a total maximum aggregate amount of $5,000,000 inclusive of applicable taxes. Staff has included additional contingency funds in the maximum amount and requests an additional 15% contingency to account for recent market volatility. The requested authorization is subject to review and approval as to form of all agreements and/or purchase orders by the City Attorney and appropriation of funds.
Delivery Timeline
Deliveries are expected to take place between September 2025 and December 2025. Payments will be based on the successful completion of key milestones. A minimum of 10% of the contract amount will be withheld until the City’s final acceptance of the equipment. A two-year warranty period is anticipated to cover parts and labor and will commence upon final acceptance of each unit.
Additional Quantities
As part of the expansion, SVP may need to purchase additional steel structures, 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, which states “at the discretion of the Purchasing Division Manager, additional quantities may be purchased after the initial award of a contract or purchase order for general services or 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 Council, then Council approval is required.”
Finance will provide a report to the City Council on the outcome of the solicitations at a later date.
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 and supplies for the Northern Receiving Station (NRS), Kifer Receiving Station (KRS), and Scott Receiving Station (SRS).
FISCAL IMPACT
The amount to be paid to the vendors under these agreements are not-to-exceed $5,000,000 for the initial quantity of units noted in Tables 1-3 and an additional $750,000 for a 15% contingency of the total contract value for a total maximum authorization not to exceed $5,750,000. Sufficient appropriations are available in the Electric Utility Capital Fund for the three receiving station rebuild and replacement projects - SRS, KRS, and NRS. On September 10, 2024, the City Council approved the issuance of electric revenue bonds which provide funding for the rebuild and replacement projects.
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. Subject to compliance with Chapter 2.105 of the City Code, review and approval as to form by the City Attorney, and appropriation of funds, authorize the City Manager or designee to negotiate and execute agreements or purchase orders with vendors for steel structures for the Northern Receiving Station, Kifer Receiving Station, and Scott Receiving Station projects for a maximum aggregate compensation amount of $5,000,000 plus a 15% contingency ($750,000) for a total maximum amount not to exceed $5,750,000; and
2. Authorize the City Manager or designee to (a) take any actions as necessary to implement and administer the agreements and/or purchase orders, and (b) negotiate and execute amendments to the agreements or purchase orders for (i) design changes, (ii) any unanticipated issues, (iii) extensions of the term, (iv) de minimis revisions, or (v) the purchase of additional steel structures, subject to the above maximum aggregate compensation limit and 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