REPORT TO COUNCIL
SUBJECT
Title
Action on a Substation Expansion Agreement with CoreSite Real Estate Limited Partnerships on Coronado Drive and Stender Way and Approval of Budget Amendment
Report
BACKGROUND
On December 6, 2011, Council approved a Special Facilities Agreement for Electric Services with CoreSite Coronado Stender, L.L.C. and CoreSite Real Estate 2901 Coronado, L.L.C., (CoreSite L.L.C.) for the CoreSite Data Center Development. The City’s Electric Department, Silicon Valley Power (SVP), agreed to design, construct and operate the substation facilities to service CoreSite L.L.C., including the anticipated expansion of the CoreSite data center development, as well as other retail electric customers. A 60kV distribution substation was constructed and the 60kV sub-transmission system was modified. CoreSite L.L.C. paid their pro rate share of the development fees for the 40 MVA of capacity reserved at that time.
On January 8, 2013, Council approved Amendment No. 1 to the Special Facilities Agreement in order to provide interim power to the CoreSite facility at 2972 Stender Way and temporary power to 2900 Stender Way.
On May 22, 2018, Council approved Amendment No. 2 to the Special Facilities Agreement in order to increase the amount of electric capacity that CoreSite may receive from SVP for the CoreSite Campus. The total amount of electric capacity to be made available to the CoreSite Campus increased by 10 MVA, from 40 MVA to 50 MVA.
DISCUSSION
CoreSite will be constructing a new data center at 3045 Stender Way (SV8) and this facility will be served by SVP under the terms of this agreement. Coresite anticipates that their energy demand for their expanded campus will increase by 30 MVA after the construction of SV8. Based on the anticipated increase in electric load capacity, the addition of a third transformer bank (“Substation Expansion”) at Fairview Substation is required. Upon completion of the Substation Expansion, the total capacity available to serve the CoreSite Campus will be 80 MVA. The Customer has paid SVP for 50 MVA of capacity prior to this agreement for Substation Expansion.
This Substation Expansion agreement requires the City to procure a substation transformer and some substation switchgear (long lead materials). These items typically have a long lead time between procurement and receipt of the material. Due to the expedited time frame associated with this contract, staff is requesting that Council delegate the authority to approve the purchase of the long lead materials to the City Manager.
ENVIRONMENTAL REVIEW
The CEQA report for the new data center at 3045 Stender Way was approved by the Architectural Committee on June 6, 2018. This approval allows SVP to move forward with substation design and procurement of equipment in preparation for the Substation Expansion project.
FISCAL IMPACT
CoreSite shall pay its pro rata share of the cost of the Substation Expansion Facilities, up to a maximum of $200 per kVA of capacity reserved or $6,000,000. In addition, CoreSite will be responsible for its pro rata share of the cost to increase the capacity of the Bulk Electric System and any Transmission line modifications resulting from the added load under this Agreement up to a maximum of $83 per kVA or $2,490,000. Funds will be appropriated to the Install Fairview Substation project (CIP 591-2403). As this project was anticipated to be closed in FY 2018/19, it will be re-opened as a part of the implementation of this agreement to accumulate these new developer contributions and resulting charges.
BUDGET AMENDMENT
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2018-19 Current |
Increase/ (Decrease) |
2018-19 Revised |
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Fund 591 - Electric Utility |
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Revenues |
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Install Fairview Substation - Developer Contributions |
$0 |
$8,490,000 |
$8,490,000 |
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Expenditures |
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Install Fairview Substation - Equipment |
$2,747,023 |
$8,490,000 |
$11,237,023 |
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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 report to council 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
1.) Approve the Substation Expansion Agreement with CoreSite Real Estate Limited Partnerships to increase the amount of electric capacity to be made available from 50 MVA to 80 MVA.
2.) Delegate authority to the City Manager to approve long lead material procurement agreements.
3.) Approve the budget amendment to appropriate $8.49M into the Install Fairview Substation project (CIP 591-2403) as a part of the implementation of this Agreement to accumulate the Developer Contributions and resulting charges.
Staff
Reviewed by: John C. Roukema, Chief Electric Utility Officer
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Substation Expansion Agreement with CoreSite Real Estate Limited Partnerships