REPORT TO COUNCIL
SUBJECT
Title
Action to Delegate Authority to the City Manager to Negotiate and Execute Amendments to Agreements for Design Professional Services for Silicon Valley Power’s System Capacity Expansion Planning Including Plan Implementation and General Consulting Services
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
In Silicon Valley Power (SVP) quarterly updates to City Council, staff has reported that electrical demand in the City is expected to increase significantly over the next decade. On September 28, 2021 (Council Item 21-871), the City Council accepted SVP’s 3-year Growth Plan Strategy Report (System Growth Plan). According to this System Growth Plan, SVP peak load projections are 879 MW in 2024 and 1125 MW in 2031. Compared to a 2021 peak of 598 MW, this is an increase of nearly 100% in ten years. The System Growth Plan identified ten system expansion projects required to be completed by 2024 to meet this increased load demand safely and reliably. Meeting this electrical demand from future growth requires additional engineering support in three areas: (1) System Expansion Planning, (2) General Consulting, and (3) Plan Implementation.
On October 13, 2020, Council approved (Council Item 20-854) agreements with (1) five firms (1898 & Co., TRC Solutions, Inc., Electrical Consultants, Inc., AECOM Technical Services, Inc., and Stantec Consulting Services Inc.) in the amount of $3,000,000 per agreement for plan implementation; and (2) five firms (Advisian Worley Group, TRC Solutions, Inc., Leidos Engineering, LLC, Flynn Resource Consultants, Inc. and EN Engineering LLC.) in the amount of $2,000,000 per agreement for general consulting services. The total maximum compensation of these ten agreements is authorized not to exceed $25 million over a five-year period. On May 13, 2022, Council authorized the City Manager to execute Amendment No. 1 to the Agreement with AECOM Technical Services Inc. for program management services associated with the System Growth Plan increasing maximum compensation from $3 million to $11 million to perform program management services for SVP’s System Expansion Plan increasing the aggregate authorization for these ten agreements to $33 million.
When a specific project is identified, staff issues a call for proposals that invites these prequalified consultants to submit qualifications and the award is based on factors such as project specific qualifications and experience, availability of staff, project approach, proposed scope of services, project schedule and design completion dates.
DISCUSSION
The System Growth Plan more than doubles the current capital improvement project backlog and managing and delivering these projects from detailed design through construction requires the technical knowledge these firms have. For example, the System Growth Plan includes a recommendation for a full rebuild and replacement of Scott Receiving Station (SRS) and Kifer Receiving Station (KRS). SRS and KRS will require a complete demolition and redesign to convert the outdoor air-insulated equipment to outdoor gas-insulated equipment to increase capacity and reliability in order to provide electric services to businesses and residences. These receiving station projects each have an estimated construction cost of $65 million each. After the call for proposal process, TRC Solutions, Inc. (TRC) was selected as the most qualified firm to support engineering design and construction support for the rebuild of SRS and KRS. The total cost of work is estimated at $5.2 million. The current maximum compensation authorized for TRC is $3 million and some of those funds have been allocated to other capital projects. As SVP is continuing to issue call for proposals for projects associated with the System Growth Plan, additional amendments to this agreement or other agreements will be needed.
To meet the demand for growth in capacity over the next 10 years, SVP has a capital plan exceeding $250 million. As a guideline, 20% of capital project costs are associated with engineering services such as design and construction management. To address these engineering costs, staff recommends that City Council authorize the City Manager to negotiate and execute additional amendments to the agreements with an additional aggregate compensation of $17 million to allow staff the flexibility of funding agreements as projects are awarded.
ENVIRONMENTAL REVIEW
This action being considered is for program and project management services and does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15061(b)(3). It can be seen with certainty that there is no possibility that the proposed approvals will have a significant effect on the environment. When capital projects included in the growth strategy move forward, appropriate CEQA will be completed as required prior to construction.
FISCAL IMPACT
To provide the necessary engineering services for SVP’s significant capital program, this action would authorize the City Manager to approve contract amendments for ten firms up to a revised additional aggregate maximum compensation of $17 million, subject to the appropriation of funds. The capital project funding for each amendment would be identified at the time the amendment is brought forward. For instance, the increased maximum compensation for the TRC agreement described above is available in the Electric Utility Capital Fund for the KRS Rebuild and Replacement (CIP# 2453) and SRS Rebuild and Replacement (CIP#2456) projects.
Funds required for these agreements in future years are subject to budget appropriations and will be incorporated into the budget development process for those years.
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> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to negotiate and execute amendments to Agreements for Design Professional Services for Silicon Valley Power’s System Capacity Expansion Planning with an additional aggregate maximum compensation of $17 million, subject to the appropriation of funds for the following:
A. For general consulting services with:
1). Advisian Worley Group
2). TRC Solutions, Inc.
3). Leidos Engineering, LLC
4). Flynn Resource Consultants, Inc.
5). EN Engineering LLC
B. For plan implementation services with:
1). 1898 & Co.
2). TRC Solutions, Inc.
3). Electrical Consultants, Inc.
4). AECOM Technical Services, Inc.
5). Stantec Consulting Services Inc.; and
2. Authorize the City Manager to:
A. Execute amendments to extend the term of the Agreements if required to complete projects initiated during their term;
B. Negotiate and execute amendments to add or delete services consistent with the scope of the agreements and allow future rate adjustments subject to request and justification by contractor, approval by the City, and the appropriation of funds; and
C. Take such actions as necessary or advisable to implement the agreements as amended.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Rajeev Batra, City Manager