REPORT TO COUNCIL
SUBJECT
Title
Approval of Twelve (12) New Positions for Silicon Valley Power and One (1) New Position in the City Attorney’s Office to Support Silicon Valley Power’s Expanded System
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
In November 2019, the Silicon Valley Power (SVP) management team met to discuss the strategic priorities for SVP. At that time, it was identified that the SVP was going to experience significant continued electric load growth, and SVP needed to develop a capital improvement strategy to meet this growth. Staff determined the need to develop both near-term and long-term strategies to accommodate approved growth and develop the necessary infrastructure plan options. The City Council has taken many actions in support of this growth as a part of the SVP’s System Expansion Plan, including approving master service agreements with engineering consulting firms (RTC’s 20-854, 22-166, and 23-737), accepting SVP’s Three-Year System Growth Plan Strategy (RTC 21-871), and adopting SVP’s system plan for California Independent System Operator’s (CAISO) Transmission Planning Process (TPP) FY2023/24 (SVP System Expansion Plan CAISO TPP FY2023/24) (RTC 22-1172).
SVP staff has worked non-stop on a number of projects required to increase electric capacity in Santa Clara to meet the needs of SVP’s customers. The City Council has also taken some actions to increase staff, but additional staff is needed both to support the delivery of required infrastructure projects as the expanded systems are built and to support ongoing operations and maintenance of an expanded system.
Silicon Valley Power Growth
As discussed with the City Council on multiple occasions, the demand for electric power from SVP’s customers is expected to almost double over the next ten (10) years. During the recent heat wave, SVP reached a new system peak demand of 711 MW. This exceeded the peak of 703 in 2022. With the new system expansion projects, and the CAISO transmission line to be constructed by LS Power, SVP is expected to reach a peak of +/-1250 MW by 2030. In addition, staff is exploring in-city generation opportunities to provide additional capacity.
Silicon Valley Power Organizational Review
Based on SVP’s current load, future load, and expansion projects, additional staff is needed to deliver, operate, and maintain the electrical system. The City is in process of completing an organizational analysis to determine the staffing needs for SVP, but that process will not be completed for another 9-12 months with recruitments starting after its completion. SVP has near term needs prior to that, such as the construction of the North Receiving Station (NRS), Scott Receiving Station (SRS), Kiefer Receiving Station (KRS), and 115kV transmission line (115 kV) which all will be under construction starting in 2025. While a consultant will complete a full SVP staffing needs analysis, staff has completed some preliminary comparison points with other utilities that help validate the need for additional staff in the interim. Based on estimated 2040 amounts, this trend increases as SVP expands the system. Below are the summary tables:
Employee per MW
|
Year |
SVP |
Alameda |
Palo Alto |
Roseville |
SMUD |
|
2024 |
0.3 |
1.3 |
0.6 |
0.6 |
1.4 |
|
2040 |
0.1 |
0.9 |
0.9 |
0.4 |
2.0 |
Employee per Substation
|
YearSVPAlamedaPalo AltoRosevilleSMUD |
|
|
|
|
|
|
2024 |
7.0 |
28.3 |
29.4 |
9.4 |
38.9 |
|
2040 |
6.2 |
28.3 |
29.4 |
9.4 |
38.2 |
DISCUSSION
Staff has completed a preliminary review of its needs and is requesting new critical positions for SVP. These new positions align with current strategic objectives. Starting recruitment as soon as possible, even though it is in advance of the overall organizational review, will align new resources with the upcoming major expansion projects which is critical. Staff expects recruitment to require at least six months. It must be noted that electric utility positions continue to be competitive and difficult to recruit. SVP’s current vacancy rate is 18% and SVP has experienced failed recruitments with no candidates ultimately accepting an offer. SVP currently has 222 positions and if the 12 positions are approved that will increase to 234.
Below is a summary of needs and positions:
Growth Projects Engineering
The CIP project portfolio managed by SVP currently includes fifty-two (52) projects with a value of approximately $420 million in FY 2024/25. In addition, SVP has a separate team that focuses on the $400+ million System Expansion Plan projects (NRS, KRS, SRS, 115 kV Transmission). There are a number of additional expansion projects that staff is working on that require additional full-time employees for successful design and delivery. These include:
• Four 60kV reconductor projects
• Breaker replacement projects
• Phase Shifting Transformer project
• Construction of seven substations
• Two additional distribution substation expansions
• Completion of Twenty Year (20) System Expansion Plan
Staff recommends the following new positions to expand the capital project delivery team, transfer institutional knowledge and increase the technical depth for critical positions:
1. One Principal Electric Utility Engineer
2. One Senior Electric Utility Engineer
3. One Assistant Electric Utility Engineer
Operations
The operations group will be involved in all new projects. Operations staff needs to support all the construction, inspection, and commissioning of all the new projects including NRS, KRS, SRS, 115, new substations, etc. Once those substations are commissioned, SVP staff will be responsible for ongoing operations and maintenance including protection, communication and control. To support this work four new positions are needed:
1. One Electric Division Manager
2. Three Electric Utility Engineers
Resources, Rates and Customer Engagement
Historically, SVP staff has negotiated one or two Power Purchase Agreements (PPA) concurrently. For example, in 2011 the Resources group managed 18 projects for a total of approximately 915 MW (nameplate). Today the Resources group is responsible for the monitoring, scheduling, settlement and compliance of 32 projects totaling approximately 1,700 MW (nameplate).
To facilitate growth and meet California’s renewable energy requirements, SVP staff is now working on twelve (12) PPAs concurrently. This includes 7 PPAs directly for SVP resource needs and 5 PPAs in coordination with the Northern California Power Agency (NCPA). In addition, this team will project manage and implement the new Outage Management System (OMS) and outage coordination. To support all this work, three new positions are needed:
1. One Senior Resource Analyst (support compliance and power contracts)
2. One Principal Power Analyst (support rates and power contracts)
3. One Senior Business Analyst (OMS and Outage coordination)
Business Services and Administration
Most of the construction, maintenance, and operations needs are supported by contractors. Between the Business Services Division, Purchasing Division of the Finance Department, and the City Attorney’s Office, it is typical to have over 200 contracts requiring attention. Therefore, all the above work requires the business services team at SVP to support construction contracts, collaboration with the Purchasing Division of the Finance Department, authorization of work from master agreements such as those with engineering firms and general service contractors (electricians, millwrights, insulation contractors, etc.), and insurance, and prevailing wage compliance.
1. Two new Power Contract Specialist positions
City Attorney’s Office
The CAO provides support, advice, and legal review of many SVP legal issues. including the 200 contracts items discussed above. Currently, there is one Senior Counsel for Silicon Valley Power assigned to SVP. Staff estimates there are over 40 unique types of agreements required by SVP, including, service agreements, public works construction contracts, substation agreements, deposit agreements, fiber lease agreements, pole contact agreements. The Senior Counsel also is heavily involved with the City’s renewable energy and resource adequacy procurement and assists with the negotiation of renewable power purchase agreement, resource adequacy agreements, and western system power pool confirmations. In addition, Senior Counsel is engaged in fee title and easement sale and acquisition.
In addition to the legal advice on a wide range of utility issues, the Senior Counsel manages SVP’s special outside counsel handling SVP’s regulatory, litigation and other matters and assists with its public records act requests. With SVP’s projected growth, there is a need to support the Senior Counsel on all the unique work. Adding a Deputy City Attorney will allow this work to be done both cost-effectively, and with enhanced quality and responsiveness to SVP legal needs.
1. One Deputy City Attorney to provide that additional support.
ENVIRONMENTAL REVIEW
The proposed staffing changes are not a project subject to the California Environmental Quality Act (CEQA) pursuant to section 15378(b)(5) of Title 14 of the California Code of Regulations as they are administrative activities that will not result in direct or indirect physical changes to the environment.
FISCAL IMPACT
The annual cost of the thirteen (13) positions listed is approximately $3.8 million and would be funded by the Electric Utility Fund. The projected system growth will result in a net revenue increase to cover these additional personnel expenditures. SVP estimated revenues in FY23/24 for charges for services were $633 million. The estimated revenue for charges for services in FY 2029/30 are projected to exceed $1.1 billion. Considering hiring timelines, it is likely that only a few positions will be filled during this fiscal year. As positions are hired, SVP staff will monitor the operations budget and, if budget actions are needed for FY 2024/25, SVP staff will coordinate operating budget adjustments through monthly financial reports submitted by the Finance Department. Future budgets, revenue projections, and rate adjustment calculations will include the costs of the new positions.
For future years, the annual cost will be incorporated into the annual operating budget through the regular process.
COORDINATION
This report has been coordinated with the Finance Department, Human Resources 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 <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
That the City Council approve the addition of twelve new positions for Silicon Valley Power and 1.0 new position in the City Attorney’s Office to support Silicon Valley Power’s expanded system as follows:
• One Principal Electric Utility Engineer
• One Senior Electric Utility Engineer
• Three Electric Utility Engineers
• One Assistant Electric Utility Engineer
• One Electric Division Manager
• One Senior Resource Analyst
• One Principal Power Analyst
• One Senior Business Analyst
• Two Power Contract Specialists
• One Deputy City Attorney
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager