REPORT TO COUNCIL
SUBJECT
Title
Action on Authorizing the City Manager to (1) Execute Agreements With Allied Power Group, LLC and Erwin Services Corporation for a Maximum Compensation of $1,000,000 for Each Agreement and (2) to Negotiate and Execute Amendments to Agreements with TransCanada Turbines, General Electric Packaged Power LLC, Stephens Mechanical Corporation, Axis Mechanical Group, Performance Mechanical, Inc., Allied Power Group, LLC, and Erwin Services Corporation for Millwright Services for an Aggregate Maximum Compensation of $100 Million to be Funded by Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
Silicon Valley Power (SVP) operates two power plants in Santa Clara - the Donald Von Raesfeld (DVR) Power Plant and the Gianera Generating Station (Gianera). These power plants are critical to SVP's continued energy generation operations. DVR and Gianera are vital for maintaining the stability and reliability of the grid and supporting the increase in demand for electricity. In addition, operating these power plants within the City results in revenue exceeding $40 million annually and also help to avoid Transmission Access Charges (TAC) exceeding $20 million annually. TAC charges are costs that SVP must pay to use transmission lines to bring power to the City. Since DVR and Gianera are located within the City the TAC does not apply. During some periods, operating DVR and Gianera results in revenue exceeding $600,000 per day. SVP also operates power generation facilities outside of the City that require maintenance and repairs including the Stony Creek Hydroelectric System and the Grizzly Hydroelectric Project.
The gas and steam turbines at DVR and Gianera have been in operation for over twenty years and are critical to SVP. In 2020, staff began developing a proactive approach to overall SVP maintenance, including power plants, to increase reliability. SVP relies o...
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