REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Negotiate and Execute Agreements with ProEnergy Services, LLC and GE Vernova International LLC for Gas Turbine Engine Field and Depot Services for Silicon Valley Power, for Additional Compensation Not-to-Exceed $20 Million, for a Total Combined Maximum Compensation Not-to-Exceed $50 Million, Inclusive of $30 Million Previously Authorized by the City Council
Report
BACKGROUND
Silicon Valley Power (SVP), the City of Santa Clara's electric utility, owns and operates two gas turbine generation units at the Donald Von Raesfeld (DVR) Power Plant that are critical to system reliability, grid support, and emergency generation. To maintain operational readiness, the power plant requires ongoing gas turbine field and depot services, including inspections, maintenance, repairs, technical support, and replacement parts.
On April 6, 2021 (RTC 21-228), the City Council authorized the City Manager to negotiate and execute master service agreements with General Electric Packaged Power, LLC (GE Packaged Power) and TransCanada Turbines Inc. (TCT) for gas turbine field and depot services for a five-year term with an aggregate maximum compensation of $30 million.
On May 28, 2021, the City executed an agreement with TCT for turbine maintenance and repair services effective through April 5, 2027, with four additional renewal options through April 5, 2031. The City did not execute the agreement with GE Packaged Power because the agreement terms could not be finalized. Approximately $9 million remains available under the existing City Council authorization for TCT; nevertheless, recent turbine repair events highlight the need for additional qualified contractors to improve access to critical turbine components, increase service availability, and enhance operational reliability.
Staff determined that it is in the City's best interest to re-solicit these services to establish agreements with additional qualifie...
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