HomeMy WebLinkAbout2001-05-21 City Council (6)City of Palo Alto.
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:.
SUBJECT:
MAY 21, 200!CMR:240:01
APPROVAL OF A BUDGET AMENDMENT ORDINANCE TO
CREATE CAPITAL IMPROVEMENT PROJECT 0121, NATURAL
GAS BACK UP GENERATOR PROJECT, IN THE AMOUNT OF
$4,612,739 AND APPROVAL OF CONTRACT WITH ENERGY
MASTERS INTERNATIONAL IN THE AMOUNT OF $4,512,739
FOR THE PROCUREMENT, INSTALLATION, AND START:UP OF
A 5-MEGAWATT BACK UP NATURAL GAS GENERATOR
SYSTEM
RECOMMENDATION
Staff recommends that Council:
Approve and authorize the Mayor to execute the attached contract with Energy
Masters International in the amount of $4,512,739 for the purchase of 5-
Megawatts (MW) of natural gas-fired back up generators and related engineering,
installation and support services.
Approve the attached Budget Amendment Ordinance (BAO) in the amount of
$4,612,739 from the Electric Supply Rate Stabilization Reserve to create Capital
Improvement Program (CIP) Project 0121, Natural Gas Back Up Generator.
CMR:240:01 Page 1 of 5
DISCUSSION
Because of the deteriorating energy situation in California, the City of Palo Alto Utilities
(CPAU) and the City Manager feel there is an urgent need to provide emergency back-up
generating resources within Palo Alto. CPAU has installed 5 MW of diesel generators on
an emergency short-term basis (CMR 198:01). CPAU proposes to install 5 MW of
natural gas fired generators to replace the diesel generators as soon as possible to provide
a cleaner, efficient, longer-term solution.
The diesel generators are scheduled for removal once the natural gas generators are
operational. The natural gas generators would be installed as early as August 1, 2001.
The latest the diesel generators would be removed is September 15,2001.
Project Description
The work to be performed under the contract .is for the engineering, procurement and
construction related to the lease-purchase of 5 MW of portable natural gas back-up
generators (four units which are each 1350 kW) to be located at the City of Palo Alto
Municipal Service Center (MSC). Energy Masters International, a wholly owned
subsidiary of Planergy International, will be serving as the turn-key contractor for this
project. Energy Masters will provide the following services:
1)Procurement and installation of 5 MW of natural gas generation at the MSC, and
related engineering and construction services.
2)Start-up, testing and operator training.
The primary function of the 5 MW back2up generators is to reduce rolling blackouts for
customers. The back-up generators are part of a three-pronged approach that includes
conservation and energy efficiency investments, a load management program, and back-
up generation. The 5 MW generators will be used during Stage 3 electric shortages .when
the California Independent System Operator (ISO) has required Palo Alto to curtail load
on the electric system, and to occasionally provide relief from spiraling costs during
periods of peak electricity demand.
Contractor Selection Process
Staff conducted an extensive survey of available equipment and equipment suppliers.
Based on this solicitation survey and the information received, staff has determined that
CMR:240:01 Page 2 of 5
the Energy Masters International proposal is the best available option to provide the
engineering, procurement and installation, and maintenance services for this 5 MW
project. The Purchasing Department~ and CPAU have been involved with the selection of
Energy Masters International as the contractor and with the selection of the preferred
generating equipment for the project. The City Manager believes the project requires
immediate implementation in order to limit the severity and frequency of rolling
blackouts for Summer 2001 and to displace these services currently being provided by
diesel generators. Based on the market survey, staff prepared a sole source authorization
request that was approved by the City Manager’s office.
Seven leading vendors of natural gas generators were asked to submit proposals for 5
MW generator alternatives. Four quotations were submitted and three declined to quote.
Natural gas generators are in short supply. Gas turbines and reciprocating engines were
evaluated. A Deutz reciprocating spark-ignition natural gas generator offered by Stewart
and Stevenson was selected based on a combination of low air emissions, availability,
price, efficiency, support, reliability and reputation.
RESOURCE IMPACT
The project costs ($4,612,739 total) include the following:
Contract Costs: Energy Masters Intemational ($4,512,739)
¯ Purchase of the natural gas generators ($3,240,000) subcontracted to Stewart and
Stevenson (generator manufacturer)
¯Sales tax on generator purchase ($259,200)
¯Extended service warranty ($216,000)
¯Delivery, engineering and installation of natural gas generators ($797,539)
Non-contract Costs ($100,000)
¯Gas service line and meter set ($50,000)
¯Electrical transformer and switch modifications required for the electrical connections
to the generators ($50,000).
The BAO will provide the required funding for this contract. Maintenance services will
be paid out of the electric operating budget, with estimated annual costs of $12,000.
CMR:240:01 Page 3 of 5
Utility and Purchasing staff conducted a thorough analysis of ownership altematives.
Purchase, 3-year lease, 5-year lease, and rental altematives were evaluated. Staff
recommends purchasing the equipment. Purchasing the generators has the lowest overall
cost, and does not preclude evaluating converting to a lease should such an arrangement
be beneficial to the City.
The attached BAO requests an additional appropriation of expenses and has an impact of
$4,612,739 on the Electric Supply Rate Stabilization Reserve. Future year.ongoing costs
anticipated as a result of this BAO include maintenance and fuel costs. Fuelcosts are
offset in part by avoided purchases of electricity at market rates. Attachment B
summarizes the BAOs approved to date in 2000-0 l that impact reserves. This attachment
also estimates future year ongoing costs associated with BAOs approved to date to
provide a projection for the future resource needs from the Utilities Rate Stabilization
Reserves for those programs approved after the adoption of the 2000-01 Budget.
POLICY IMPLICATIONS
This recommendation is consistent with prior Council action with regards to the current
energy emergency.
ENVIRONMENTAL REVIEW
The project for the procurement of the natural gas generators is exempt under the
California Environmental Quality Act (CEQA), pursuant to section 15301 of the CEQA
Guidelines.
The project requires approval by the Architectural Review Board (ARB), which was
granted May 16, 2001.
The project requires, a Bay Area Air Quality Management District (BAAQMD) permit.
The permit application materials were submitted to BAAQMD on May 4, 2001
(application #2779). Staff expects that all permits will be in place in time for the project
to proceed on schedule.
CMR:240:01 Page 4 of 5
ATTACHMENTS
C;
Budget Amendment Ordinance
Budget Amendment Ordinances Impacting the Electric Supply Rate Stabilization
Reserve Approved to Date in 2000-01
CIP Project 0121 Description
Contract
PREPARED BY:
Karl Knapp,Specialist
DEPARTMENT HEAD:
ULRICH
)irector of Utilities
CITY MANAGER APPROVAL:
EMILY HARRISON
Assistant City Manager
CMR:240:01 Page 5 of 5
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING THE BUDGET FOR THE FISCAL YEAR 2000-01 TO
PROVIDE AN APPROPRIATION OF $4,612,739 FOR NATURAL GAS
BACK-UP GENERATORS CAPITAL IMPROVEMENT PROJECT, NUMBER
0121 ~
WHEREAS, pursuant to the provisions of Section 12 of Article
III of the Charter of the City of Palo Alto, the Council on June 19,
2000 did adopt a budget for fiscal year 2000-01; and
WHEREAS, the Utilities Department has identified the immediate
need to mitigate the potential severity and frequency of rolling
blackoutsexpected for summer 2001, as well as a long term needof
unknown duration; and
WHEREAS, staff conducted an extensive survey of available
equipment and equipment suppliers and determined that 5 megawatts
of natural gas generation could, replace the temporary diesel
generators that were installed on an emergency basis, and could
mitigate the impact of rolling blackouts; and
WHEREAS, the City has contracted with Planergy International
for the purchase of 5 MW natural gas back-up generation (4 units @
1350 kW), and associated engineering, installation and maintenance
services; and
WHEREAS, an additional appropriation of $4,-612,739 is needed
to coverthe unforeseen expenses relating to the procurement and
related contractual expenses of the back-up generators; and
WHEREAS, the budget must be amended to create and fund a
capital improvement project for the purchase of the generators;
WHEREAS, this procurement will result in additional annual
maintenance and fuel costs that will be included in the proposed
budget for 2001-03; and
WHEREAS, City Council authorization is needed to amend the
2000-01 budget as hereinafter set forth.
NOW, THEREFORE, the Council of the City of Palo Alto does
ORDAIN as follows:
SECTION I. Capital Improvement Project (CIP) 0121, Natural
Gas Back-Up Generators, is hereby created.
SECTION 2. The sum of Four Million Six Hundred Twelve
Thousand Seven Hundred Thirty Nine Dollars ($4,612,739) is hereby
appropriated to Capital Improvement Project Number 0121, Natural Gas
Back-Up Generators, and the Electric Supply Rate Stabilization
Reserve is correspondingly reduced.
SECTION 3. This appropriation will reduce the Electric Supply
Rate Stabilization Reserve from $24,725,000 to $20,112,261.
SECTION 4. As specified in Section 2.28.080(a) of the Palo
Alto Municipal Code, ~a two-thirds vote of the City Council is
required to adopt this ordinance.
SECTION 5. This project is exempt from the provisions of the
California Environmental Quality Act (~CEQA") pursuant to Section
15301 (Existing Facilities) of the CEQA Guidelines.
SECTION 6. As provided in Section 2.04.350 of the Palo Alto
Municipal Code, this ordinance shall become effective upon adoption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:
Senior Asst. City Attorney
City Manager
Director of
Services
Administrative
Director.of Utilities
PROJECT DESCRIPTION
This project provides for turnkey procurement and installation of four (5 MW total power) natural gas fired
generators at the Municipal Service Center to replace diesel generators. The gas fired generators will provide a
cleaner, efficient, longer-term solution for back-up generation.
The 5 MW generators will be used during Stage 3 electric shortages when the California Independent System
Operator (ISO) has required Palo Alto to curtail load on the electric system, and to occasionally provide relief from
spiraling costs during periods of peak electricity demand.
PROJECT JUSTIFICATION
This project is part of a three-pronged approach for reducing rolling blackouts for Palo Alto residents and.
businesses that includes conservation and energy efficiency investments, a load management program, and back-up
generation.
FUTURE FINANCIAL REQUIREMENTS
FISCAL YEAR
PY Budget
2000-01
2001-02
2002-03
2003-04
2004-05
AMOUNT
$4,612,739
COMPONENTS
Turnkey generator installation
Sources of Funding: Electric Fund
IMPACT AND SUPPORT ANALYSIS
¯Environmental:
¯Design Elements:
¯Operating:
Telecommunications:
Categorically exempt from CEQA under Section 15301. BAAQMD permit required.
Staff-level ARB review required.
Maintenance costs are $12,000 per year. Fuel cost is $500 per operating hour and is
offset by reduced electricity purchases.
None. ,J
COMPREHENSIVE PLAN
This project furthers Policy N-45 of the Comprehensive Plan.
451
City of palo Alto
Attachment B
Budget Amendment Ordinances Impacting Utilities Rate Stabilization Reserve Approved To Date in 2000-01
05/18/01
iElectric Fund.
iEstimated Electric Supply Rate Stabilization Reserve (RSR
iBalance
iPublic Benefit BAO
iBack-Up Generator BAO (CIP 9803 $150,000)
iNatural Gas Back-Up Generators (CIP 0121)
i Total BAOs
iRSR Balance After BAO’s
$28,750,000
($3,500,000)($3,50~,000)
($525,OOO)($525,O00)
($4,612,739)($4,612,739)
($8,637,739)$0 ($8,637,739)
$20,112;261
$515,308
$515,308
CONTRACT NO.
BETWEEN THE CITY OF PALO ALTO AND
ENERGY MASTERS INTERNATIONAL, INC. FOR ENGINEERING,
CONSULTING, PROCUREMENT AND OPERATIONAL
SUPPORT SERVICES -~
This Contract No. is entered into ,
by and between the CITY OF PALO ALTO, a chartered city and a
municipal corporation of the State of California ("CITY"), and
ENERGY MASTERS INTERNATIONAL, INC., a Minnesota corporation, and a
wholly owned subsidiary of Planergy International, Inc., a Delaware
corporation, with offices at 1003 W. Cutting Blvd., Suite II0,
Richmond, CA 94804-2028 ("CONTRACTOR").
RECITALS
WHEREAS, CITY desires certain engineering, .procurement
and construction services ("Services"), as more fully described in
Exhibit "A"; and
WHEREAS, CITY desires to engage CONTRACTOR, including its
employees, if any, in providing the Services by reason of its
qualifications and experience in performing such Services, and
CONTRACTOR has offered to provide the Services on the terms and in
the manner set forth herein;
NOW, THEREFORE, in consideration of the. covenants, terms,
conditions, and provisions of this Contract, the parties agree:
SECTION 1 -TERM
i.I This Contract will commence on the date of its
execution by CITY. The obligation of CONTRACTOR to perform the
Services will commence in accordance with the time schedule set
forth in. Exhibit "A". Time is of the essence of .this Contract. In
the event that the Services are not completed within the specified
time schedule on account of CONTRACTOR’s default, CITY’s city
manager will have the option of extending the time schedule for any
period of time. This provision will not preclude the recovery of
damages for delay caused by CONTRACTOR.
SECTION 2 - QUALIFICATIONS,
CONTRACTOR
STATUS, AND DUTIES OF
2.1 CONTRACTOR represents and Warrants that it has the
expertise and professional qualifications to furnish or cause to be
furnLshed the Services. CONTRACTOR further represents and warrants
that the project director and every individual charged with the
performance of the Services under this Contract are duly licensed
or certified by the State of California, to the extent such
010518 cl 0032456 1
licensing or certification is required by law to perform the
Services.
2.2 In reliance on the representation and warranty set
forth in Section 2.1, CITY hires CONTRACTOR to perfOrm, and
CONTRACTOR covenants and agrees that it will furnish or cause to be
furnished, the Services.
2.3 CONTRACTOR will assign Dennis Roundtree asthe
project director to have supervisory responsibility forthe
performance, progress, and execution of the Services.If
circumstances or. conditions subsequent to the execution of this
Contract cause the substitution of the project director for any
reason, the appointment of a substitute project director will be
subject to the prior written approval of the project manager.
2.4 CONTRACTOR represents and warrants that it. will:
2.4.1 Procure all permits and licenses, pay all
charges and fees, and give all notices which may be necessary.and
incident to the due and lawful prosecution of the Services;
2.4.2 Keep itself fully informed of all existing and
future Federal, State of California, and local laws, ordinances,
regulations, orders, and decrees which may affect those engaged or
employed under this Contract, any materials used in CONTRACTOR’s
performance under this Contract, or the performance of the
Services;
2.4.3 At all times observe and comply with, and cause
its employees and contractors (and consultants), if any, who are
assigned to the performance of this Contract to observe and comply
with, the-laws, ordinances, regulations, orders and decrees
mentioned above; and
2.4.4 Report immediately to the project manager, in
writing, any discrepancy or inconsistency it discovers in the laws,
ordinances, regulations,-orders, and decrees mentioned above in
relation to any plans, drawings, Specifications or provisions of
this Contract.
2.5 Any reports, information, data or other material
given to, or prepared or assembled by, CONTRACTOR or its
contractors, if any, under this Contract will become the property
of CITY and will not be made available to any individual or
organization by CONTRACTOR or its contractors, if any, without the
prior written approval of the city manager.
2.6 CONTRACTOR will provide CITY with seven (7) copies
of the final report, if any, which may be required under this
Contract, upon completion and acceptance of each report by CITY.
010518 el 0032456 2
2.7 If CITY requests additional copies of reports,
drawings, specifications or any other material which CONTRACTOR is
required to furnish in limited quantities in the performance of the
Services, CONTRACTOR will provide such additional copies and CITY
will compensate CONTRACTOR for its duplication costs ....
2.8 CONTRACTOR will be responsible for employing or
engaging all persons necessary to perform the Services. All
contractors of CONTRACTOR will be deemed to be directly controlled
and supervised by CONTRACTOR, which will be responsible for their
performance. If any employee or contractor of CONTRACTOR fails or
refuses to carry out the provisions of this Contract or appears to
be incompetent or to act in a disorderly or improper manner, the
employee.or contractor will be discharged immediately from further
performance under this Contract on demand of the project manager.
SECTION 3 "DUTIES OF CITY
3.1 CITY will furnish or cause, to be furnished the
specified services set forth in Exhibit "A" and such other
information regarding its requirements as may be reasonably
requested by CONTRACTOR.
3..2 The city manager will represent CITY for all
purposes under this Contract. John Ulrich is designated as the
project manager for the city manager. The project manager will
supervise the performance, progress, and execution of the Services,
and will be assisted by Karl Knapp, the Project Coordinator.
3.3 If CITY observes or otherwise becomes aware of any
default in the performance of CONTRACTOR, CITY will use reasonable
efforts to give written notice thereof to CONTRACTOR in a timely
manner.
SECTION 4 -COMPENSATION
4.1 In consideration of the full performance this
Contract, CITY will pay CONTRACTOR in accordance with Exhibit "B,"
at a total cost not to exceed Four Million Five Hundred Twelve
Thousand Seven Hundred Thirty-nine Dollars ($4,512,739.00). The
parties acknowledge and agree that each separate line item/category
of expense shown in Exhibit "B" shall be a maximum, not-to-exceed
amount, As well as the maximum, not-to-exceed amount for the total
contract.
4.2 CONTRACTOR may submit progress billings for
Installation Services for payment within 30 days. However, billings
and payment for Generator Equipment shall be made only in
accordance with the progress schedule set forth in Exhibit "B".
010518 el 0032456 3
SECTION 5 -AUDITS
~ 5.1 CONTRACTOR will permit CITY to audit, at any
reasonable time during the term of this Contract and for three (3)
years thereafter, CONTRACTOR’s records pertaining to matters
covered by this Contract. CONTRACTOR further agrees to maintain
and retain such records for at least three (3) years after the
expiration or earlier termination of this Contract.
SECTION 6 -INDEMNITY
6.1 CONTRACTOR agrees to protect, indemnify, defend and
hold harmless CITY, its Council members, officers~ employees and
agents from any and all demands, claims, or liability of any
nature, including death or injury to any person, property damage or
any other loss, caused by or arising out of CONTRACTOR’s, its
officers’, agents’, subcontractors’ or employees’ negligent acts,
errors, or omissions, or willful misconduct, or conduct for which
applicable law may impose strict liability on CONTRACTOR in the
performance of or failure to perform its obligations under this
Contract.
SECTION 7 -WAIVERS
7.1 The waiver by either party of any breach or
violation of any covenant, term, condition or provision of this
Contract, or of the provisions of any ordinance or law, will not be
deemed to be a waiver of any other term, covenant, condition,
provisions, ordinance or law, or. of any subsequent breach or
violation of the same or of any other term, covenant, condition,
provision, ordinance or law. The subsequent .acceptance by either
party of any fee or other money which may become due hereunder will
not be deemed to be a waiver of any preceding breach or violation
by the other party of any term, covenant, condition or provision of
this Contract or ofany applicable law or ordinance.
7.2 No payment, partial payment, accePtance, or partial
acceptance by CITY will operate as a waiver on the part of CITY of
any of its rights under this Contract.
SECTION 8- INSURANCE
8.1 CONTRACTOR, at its sole cost and expense, will
obtain and maintain, in full force and effect during the term of
this Contract, the insurance coverage described in Exhibit "C",
insuring not only CONTRACTOR and its contractors, if any, but also,
with the exception of workers’ compensation, employer’s liability,
and professional liability insurance, naming CITY as an additional
insured concerning CONTRACTOR’s performance Under this Contract.
8.2 All insurance coverage required hereunder will be
provided through carriers with Best’s Key Rating Guide ratings of
A:VII or higher which are admitted to transact insurance business
010518 cl 0032456 4
in. the State of California. Any and all contractors of CONTRACTOR
retained to perform Services under this Contract will obtain and
maintain, in full force and effect during the term of this
Contract, identical insurance coverage, naming CITY as an
additional insured under such policies as required above~.
8..3 Certificates of such insurance, preferably on the
forms provided by CITY, will be filed with CITY concurrently with
the execution of this Contract. The certificates will be subject
to the approval of CITY’s risk manager and will contain an
endorsement stating that the insurance is primary coverage and will
not be canceled or altered by the insurer except after filing with
CITY’s city clerk thirty (30) days’ prior written notice of such
cancellation or alteration, and that the City of Palo Alto is named
as an additional insured except in policies of workers’
compensation, employer’s liability, and professional liability
insurance. Current certificates of such insurance will be.kept on
file at all times during the term of this Contract with the city
clerk.
8.4 The procuring of such required policy or policies of
insurance will not be construed to limit CONTRACTOR’s liability
hereunder nor to fulfill the indemnification provisions of this
Contract. Notwithstanding the policy or policies of insurance,
CONTRACTOR will be obligated for the full and total amount of any
damage, injury, or 10ss caused by or directly arising as a result
of the Services performed under this Contract, including such
damage, injury, or loss arising after the Contract is terminated or
the term has expired.
SECTION 9 -WORKERS’ COMPENSATION
9.1 CONTRACTOR, by executing this Contract, certifies
that it is aware of the provisions .of the Labor Code of the State
of California which require every employer to be insured against
liability for workers’ compensation or to undertake self-insurance
in accordance with the provisions of that Code, and certifies that
it will comply wi[h such provisions, as applicable, before
commencing the performance of the Services~
SERVICES
SECTION i0 - TERMINATION OR SUSPENSION OF CONTRACT OR
I0.I The City manager may suspend the performance of the
Services, in whole or in part, or terminate this Contract, with or
without cause, by giving thirty (30) days’ prior written notice
thereof to CONTRACTOR. Upon receipt of such notice, CONTRACTOR
will immediately discontinue its performance of the Services.
10.2 CONTRACTOR may terminate this Contract or suspend
its performance of the Services by giving thirty (30) days’ prior
written notice thereof to CITY, but only in the event of a
substantial failure of performance by CITY or in the event CITY
010518 cl 0032456
indefinitely withholds or withdraws its request for the initiation
or continuation of the Services tobe performed.
10.3 Upon such suspension or termination by CITY,
CONTRACTOR will be paid for the Services actually rendered to CITY
on or before the effective date of suspension or termination;
provided, however, if this Contract is suspended or terminated on
account of a default by CONTRACTOR, CITY will be obligated to
compensate CONTRACTOR only for that portion of the Services which
are of direct and immediate benefit to CITY, as such determination
may be made by the city manager acting in the reasonable exercise
of her discretion.
10.4 Upon such suspension or termination, CONTRACTOR will
deliver to the city manager immediately any and-~all copies of
studies, sketches, drawings, computations, and other data, whether
or not completed, prepared by CONTRACTOR or its contractors, if
any, or given to CONTRACTOR or its contractors, if any, in
connection with this Contract. Such materials will become the
property of CITY.
10.5 The failure of CITY to agree with CONTRACTOR’s
independent findings, conclusions, or recommendations, if the same
are called for under this Contract, on the basis of differences in
matters of judgment, will not be construed as a failure on the part
of CONTRACTOR to fulfill its obligations under this Contract.
SECTION ii -ASSIGNMENT
ii.I This Contract is for the personal services of
CONTRACTOR, therefore, CONTRACTOR will not assign, transfer,
convey, or otherwise dispose.of this Contract or any right, title
or interest in or to the same or any part thereof without the prior
written consent of CITY. A consent to one assignment will not be
deemed to be a consent to any subsequent assignment. Any
assignment made without the approval of the city manager will be
void and, at the option ofthe city manager, this Contract may be
terminated. This Contract will not be assignable by operation of
law.
SECTION 12 -NOTICES
12.1 All notices hereunder will be given in writing and
mailed, postage prepaid, by certified mail, addressed as follows:
To CITY:Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303
010518 cl 0032456
To CONTRACTOR: Attention of the project director
at the address of CONTRACTOR recited
above
6
SECTION 13 -CONFLICT OF INTEREST
13.1 In accepting this Contract, CONTRACTOR covenants
that it presently has no interest, and will not acquire any
interest, direct or indirect, financial or otherwise, which would
conflict in any manner or degree with the performance of the
Services.
13.2 CONTRACTOR further covenants that, ~ in the
performance of this Contract, it will not employ any contractor or
person having such an interest. CONTRACTOR certifies that no
person who has or will have any financial interest under this
Contract is an officer or employee of CITY; this provision will be
interpreted in accordance with the applicable provisions of the
Palo Alto Municipal Code and the Government Code of the State of
California.
SECTION 14 -NONDISCRIMINATION
14.1 As set forth in the Palo Alto Municipal Code, no
discrimination will be made in the employment of any person under
this Contract because of the age, race, color, national origin,
ancestry, religion, disability, sexual preference or gender of that
person. If the value of this Contract is, or may be, five thousand
dollars ($5,000) or more, CONTRACTOR agrees to meet all
~equirements of the Palo Alto Municipal Code pertaining to
nondiscrimination in employment, including completing the requisite
form furnished by CITY and set forth in Exhibit "D".
14.2 CONTRACTOR agrees that each contract for services
with an independent provider will.contain a provision substantially
as follows:
"[Name of Provider] will provide CONTRACTOR
with a certificate stating that [Name of
Provider] is currently in compliance with all
Federal and State of California laws covering
nondiscrimination in employment; and that
[Name of Provider] will not discriminate in
the employment of any person under this
contract because of the age, race, color,
national origin, ancestry, religion,
disability, sexual preference or gender of
such person."
14.3 If CONTRACTOR is found in violation of the
nondiscrimination provisions of the State of California Fair
Employment. Practices Act or similar provisions of Federal law or
executive order in the performance of this Contract, it will be in
default of this Contract. Thereupon, CITY will have the power to
cancel or suspend this Contract, in whole or in part, orto deduct
the sum of twenty-five dollars ($25) for each person for each
calendar, day during which such person was subjected to acts of
010518 cl 0032456 7
discrimination, as damages for breach of contract, or both. Only
a finding of the State .of California Fair Employment Practices
Commission or the equivalent federal agency or officer will
constitute evidence of a breach of this Contract.
SECTION 15 -MISCELLANEOUS PROVISIONS
15.1 CONTRACTOR represents and warrants that it has
knowledge of the requirements of the Americans with Disabilities
Act of 1990, and the Government Code and the Health and Safety Code
of the State of California, relating to access to public buildings
and accommodations for disabled persons, and relating to facilities
for disabled persons. CONTRACTOR will comply with or ensure by its
advice that compliance with such provisions will be effected in the
performance of this Contract.
15.2 This Contract will be governed by the laws of the
State of California, excluding its conflicts of law.
15.3 In the event that an action is brought, the parties
agree that trial of such action will be vested exclusively in the
state courts of California orin the United States District Court
for the Northern District of California in the County of Santa
Clara, State of California.
15.4 The prevailing party in any action brought to
enforce the provisions.of this ContraCt may recover its reasonable
costs and attorneys’ fees expended in connection with that action.
15.5 This document represents the entire and integrated
agreement between the parties and supersedes all prior
¯ negotiations, representations, and contracts, either written or
oral. This document may be amended only by a written instrument,
which is signed by the parties.
15..6 All provisions of this Contract, whether covenants
or conditions, will be deemed to be both covenants and conditions.
15.7 The covenants, terms, conditions and provisions of
this Contract will apply to, and will bind, the heirs, successors,
executors, administrators, assignees, and contractors, as the case
may be, of the parties.
15.8 If a court of competent jurisdiction finds or rules
that any provision of this Contract or any amendment thereto is
void or unenforceable, the unaffected provisions of this Contract
and any amendments thereto will remain in full force and effect.
15.9 All exhibits referred to in this Contract and any
addenda, appendices, attachments, ~and schedules which, from time to
time, may be referred to in any duly executed amendment hereto are
by such reference incorporated in this Contract and will be deemed
to be a part of this Contract.
010518 cl 0032456 8
15.10 This Contract may be executed in any number of
counterparts, each of which will be an original, but all of which
together will constitute one and the same instrument.
15.11 This-Contract is subject to the fiscal provisions
of the Charter of the City of Palo Alto and the Palo Alto Municipal
Code. This Contract, will terminate without any penalty (a) at the
end of any fiscal year in the event that funds are not appropriated
for the following fiscal year, or (b) at any time within a fiscal
year in the event that funds are only appropriated for a portion of.
the fiscal year and funds for this Contract are no longer
available. This Section 15.11 shall take precedencein the event of
a conflict with any other covenant, ~erm, condition, or provision
of this Contract.
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010518 el 0032456 9
IN WITNESS WHEREOF, the parties hereto have by their duly
authorized representatives executed this Contract on the date first
above written.
ATTEST:CITY OF PALO ALTO
City Clerk
APPROVED AS TO FORM:
Mayor
ENERGY- MASTERS
INC.
INTERNATIONAL,
Senior Asst. City Attorney
APPROVED:
Assistant City Manager
Director of Administrative
Services
Director of Utilities
Risk Manager
By:
Name :
Title:
By:
Name:
Title:
Taxpayer Identification No.
411-759-883
(Compliance with Corp. Code § 313 is
required if the entity on whose behalf
this contract is signed is a
corporation. In the alternative, a
certified corporate resolution
attesting to the signatory authority
of the individuals signing in their
respective capacities is acceptable)
Attachments :
EXHIBIT "A" :
EXHIBIT "B" :
EXHIBIT "C":
EXHIBIT "D" :
SCOPE OF PROJECT &TIME SCHEDULE
RATE SCHEDULE
INSURANCE
NONDISCRIMINATIONCOMPLIANCE FORM
010518 el 0032456 1 0
CERTIFICATE OF ACKNOWLEDGEMENT
(Civil Code § 1189)
STATE OF )
) SS.
COUNTY OF )
On , 2001, before me,
, a Notary Public in and for said County and State, personally
appeared , personally known to me
or proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed .the same.in
his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature of Notary Public
010518 ci 0032456 1 1
CERTIFICATE OF ACKNOWLEDGEMENT
(Civil Code § 1189)
STATE OF )
) SS.
COUNTY OF )
On , 2001, before me,
, a Notary Public in and for said County and State, personally
appeared , personally known to me
or proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on theinstrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature of Notary Public
010518 cl 0032456 12
Exhibit "A"
Scope of Services and Time Schedule
The Scope of Work includes the following:
Energy Masters International, Inc. shall provide the following services to evaluate, engineer, provide,
install, maintain and operate (1) Emergency generating plant approximately 5 MW capacity. Services
shall be limited to the following unless changes in scope are approved in writing by both parties:
Procure natural gas generator equipment
EngineeringfProject Management
Site survey to determine installation requirements.
Provide required electrical, mechanical and site plan drawings.
Structural, seismic, and other engineering analysis as required.
Obtain building permits as required.
Project management for all phases of project.
Natural Gas System
°,*° Site preparation
)~ Removal of landscaping and trees as required
>" Excavation of site for natural gas generator plant
¯ :° Mechanical~ Gas piping as required to reach main line (includes valves, regulator, filters, etc.)
~ Parking pad with bollards
o:, Install natural gas generator system
~Receive and set natural gas generator set (s)
)~Receive and install power control module as required
~Installation of electrical power cables and related equipment to u~ility-provided transformers and
parallel bus.
>~ Interconnections between generator sets and control systems as required
o:. Startup and testing of natural gas system.
Mandatory operator training as required
Startup and testing of system
Full set of equipment manuals for each generator set.
Natural Gas Generator System Bill ofMaterials
1.0 TECHNICAL DESCRIPTION
1.1 Generator Set General Arrangement
The basic unit is proposed with the engine/generator module mounted to the structural steel
rigid base deck and situated in the ISO enclosure in a manner that facilitates ease of
maintenance and inspection. The switchgear cabinet is adjacent to the generator and is
coupled to the pothead by buss way through, which pass the load cables. Radiators are
remote located off skid and supported by ~heir own structural steel unitized frameset with
hydraulically motor driven fans. Exhaust silencers are mounted inside the ISO-Container of
the diesel units.
External connections are provided for:
¯ Normal servicing of the equipment, (fuel, engine oil and radiator coolant drains).
010518 cl 0032456a
¯Draining the integral secondary containment for normal "make ready" cleanup or in the
unlikely event of an engine oil, fuel or coolant rupture.
Each generator set is rated 1350 kWe continuous at 105°F. Continuous power is defined as a
utility power source which will deliver power 24 hours per day for an unlimited number of
hours per year where there are non-varying load factors of up to 100% of the continuous
power rating, and/or constant dedicated loads.
1.2 Engine
The prime mover is a Deutz TBG 620 V16 with the following features:
¯Four cycle, 90° V, heavy duty gas engine.
¯The TBD 620 series is EPA certified, CARB/AQMD approved and the engineering
design will be able to meet all known future emissions requirements.
¯Maximized performance at 1800 rpm
¯Replaceable, wet type, cylinder liners
¯Steady state frequency regulation better than ± 0.5%.
¯Gear type lube oil pump, oil cooler and spin on type oil filters. The lube oil drain is
extended through the skid for ease of maintenance and incorporates a manual safety
shut off valve.
¯Microprocessor-controlled high-voltage ignition system
¯24VDC electronics, dual starter motors and master battery disconnect switch
¯Unit mounted lead acid batteries, rack and cables
¯Battery charger with NEMA rated receptacle. A static battery charger will be
provided, (120VAC customer furnished power supply is required for operation).
¯Dry type air filters with replaceable paper elements and restriction indicators.
Combustion air for the engine is drawn into the enclosure through fixed louvers and
then through heavy duty air cleaners
¯Mechanical gauges for oil pressure and water temperature.
¯Jacket water heaters including isolation valves with input receptacle.
¯Residential-area exhaust system. Exhaust silencer rain caps.
1.3 Generator
The generator is a two bearing Stamford-Newage rated 1350 kWe continuous for a
105°C temperature rise.
¯PMG exciter for superior motor starting capability
¯NEMA class H, non-hydroscopic, anti-fungal tropical insulation
¯480VAC, 3 Phase, 60 Hertz, 6 lead
¯Meets NEMA MGi-22, BS5000, CSA C22.2 and IEC 34-1 codes
¯Brushless, self-exciting, single bearing construction
¯Automatic voltage regulator with 3 phase sensing, underspeed and overload
protection circuits
¯Voltage regulation betterthan ± 0.5%.
¯Frequency precisi.on of less than 0.5% deviation
010518 cl 0032456a 2
1.4
1.5
1.6
Assembly
The generator is connected via a two bearing arrangement attached to the engine flywheel
and generator drive assembly. The engine/generator assembly is mounted on the skid with
vibration isolators sized for the weight and duty. .-..
Cooling System
The cooling system consists of remote, horizontally .mounted radiator with two cores located
offthe engine base. One core services the engine jacket water circuit and the other the
turbocharger aftercooler circuit. High capacity cooling fan is driven by electric motor.
Pulley/fan shroud housing (OSHA compliant). Air is drawn through fixed guards and past
the radiator cores. The fan is of sufficient capacity to accommodate air volume requirements
of the radiator cores. Coolant surge tanks and fan motor starter are also mounted on the
radiator support structure.
Control System
The Deutz TEM-Evo System is the logical result of further development of the highly
proven Deutz MWM TEM System. It.is designed for the engine specified. Thanks to the
large range of options the TEM=Evo System can be optimally adapted to specific
applications (e.g. landfill gas generator set, BHKW module). The control, monitoring and
viewing functions for the gas engine genset and all directly related plant elements (e.-g.
heating circuit, dry cooler) are integrated.
The TEM-Evo System consists of 3 components:
¯ Generator Set cabinet
Operator’s Terminal - The operating terminal has a fully graphical color display. The
resolution is 640 x 480 pixel and the diagonal size of the screen is more than 10
inches. The sophisticated operating concept using only 12 function buttons has been
tailored to be extremely user friendly. The TEM-Evo System is very easy to use.
¯Input/Output Module
The system can be easily adapted to local conditions. Thus the fault liability and the on-site
cabling costs are minimized. The genset cabinet is mounted next to the genset.’ Together with
the engine cabling tested in the factory, the genset cabinet connected and tested cables
leading to the genset (via plug-in connectors at the genset) assure an easy initiation and a
high operating reliability.. The output related signals are directly exchanged with the TEM-
Evo System via the I/O-module inside the auxiliary genset cabinet. The data transmission to
the genset control takes place via an error protected CAN bus connection. The operating
terminal can be freely located, i.e. at the genset or in the control room.
Each control system will have the following basic features:
¯ TEM (Total Electronic Managemen0-Evolution System controls, regulates and
monitors the complete operation of the gas engine genset. The basic system offers the
following functions:
¯Automatic program flow for genset start and stop
010518 cl 0032456a
¯TOV controlled security, chain with quick stop key and port for the security related
generators
¯Integrated data processing for all sensors at genset
¯Reliable exhaust emission adjustment to low values
¯Highly precise integrated digital speed control
¯Data link to the electronic ignition system with high performance monitoring and
diagnostics functions
¯Connection of actuators and sensors from the plant to the I/O-module in the auxiliary
genset cabinet and data transmission via CAN bus to the TEM-Evo genset cabinet
¯Monitoring of all sensors at the genset
¯Engine jacket water monitoring
¯Control and monitoring of the lube oil circuit including pre- and relubrication as well as
oil change
¯Test mode for actuator, sensor and auxiliary genset verification
¯Electronic line recorder for all acquired data (histories) checking and diagnostic purposes
during time periods of 40h/6min and synchronous to working cycles
¯Electronic operation log for recording all opei’ating, alarm and fault messages together
with their dates and times to allow detailed monitoring of the operation process
¯Electronic working hour counter with breakdown in 5 load areas
¯Convenient national language communication via an intelligent, splash-proof operating
terminal with graphical LCD color display and easy user guiding via function buttons.
Display of all data and operating states.
¯Port for color printer to print all screen shots and parameter settings
Monitoring
Engine:
Oil Pressure
Coolant Temperature
Battery Voltage
Hours to next service
Total run time
Engine RPM
Generator:
Voltage (three phases and three phases to neutral)
Total kW load
Current (three phases)
KVA (three phases)
KVA total
kW (three phases)
kWh
Power factor
Frequency
On board synchronization and load sharing capability
Power factor controller for utility paralleling
Synchroscope
Bus:
Voltage
Frequency
Generator/Bus voltage
010518 el 0032456a 4
Frequency generator or bus
Line current input (CT)
KVA
kW
KVARS
Power Factor
kWh
Alarms (Shutdowns):
~Low oil pressure
~High coolant temperature
~’Sender failures
~.Overspeed
~Overcrank
)~Low Coolant level
Pre-alarms:
Low oil pressure
Battery over voltage
Weak battery
Maintenance interval timer
High coolant temperature
Low coolant temperature
Batter undervoltage
Engine kW overload "
1.7 Breaker and Power Connections
The basic unit circuit breaker is a 4 pole with thermal magnetic trip sized for the unit
output. Electrical connections are to be oversized bus bar connections per phase with
lugs as standard termination points. Minimum 6" spread between buss bars for ample
spacing. Lugs in .the amount to match the maximum genset breaker ratihg when using
cable rated at 400A per run. Bus bar lugs should be provided capable of each accepting
600 MCM wire. Power cable access door installed exterior side of the enclosure must be
capable of being locked with power cables installed. Control circuit breakers are
included as needed. Master circuit breaker open/closed indicator lamps. The breaker
features are as follows:
Feature
Frame Size
Plug Rating
Interrupting Rating
Rating
2000A
2000A
75KA
¯UL 489 construction
¯4 pole 4 wire w/NO Internal Neutral Sensor
¯Connections: vertical top & bottom
¯ "Spring charging motor 24/30 Vdc
¯Closing coil 24Vdc
¯.Undervoltage Trip 24Vdc
010518 cl 0032456a
¯AC Control Unit Cover
¯Arc Chute Cover
¯Overeurrent Trip
¯Pre-trip Alarm Switch
¯2 Auxiliary Switches
¯Secondary Disconnects
¯Properlysized 4 pole, thermal/magnetic, 5-cycle overload circuit breaker
¯Easily readable adjustable breaker trip settings
¯Undervoltage release fitted
¯Reverse power protected
Operation and Maintenance
Energy Masters to provide interim operation and maintenance at level to be determined by mutual
agreement between Energy Masters and the City. Level of operational support to be determined.
Operation and maintenance personnel to be charged on time-and-material basis as s.et forth in attached
schedule of charges. Maintenance services will terminate upon award of final maintenance contract or at
tile discretion of the City.
Extended WarranW
The standard warranty is one (1) year, full warranty, unlimited hours for the entire scope of the Stewart
& Stevenson supplied equipment after startup or eighteen (18) months aftershipment from the Stewart &
Stevenson Factory, whichever comes first.
The price of the extended warranty offered by Stewart & Stevenson is two percent (2%) of the sale price
of the equipment for any additional year. No maintenance service contract needs to be signed for the
extended warranty. The customer is required to perform the scheduled maintenance on the equipment and
to keep verifiable records (maintenance logs) to maintain the warranty.
Energy Masters to provide at cost 4 years of extended warranty coverage beyond the first year of
standard Warranty coverage.
Substitution of Equipment~ Materials or Services
Energy Masters reserves the right to substitute or modify equipment, materials and services provided
under this contract with the written consent of the Project Manager designated by the City if such
substitution is required or desirable to meet project requirements, enhance value to the City or if original
offering becomes unavailable
Timeline
Due to the fast-track nature of this project, all scheduling is on an "ASAP" basis and the attached
timeline is a good-faith estimate. Normal completion for a project of this type is much longer. Energy
Masters does not accept responsibility for delays due to circumstances beyond our control, including but
not limited to manufacturing delays, shipping delays or other unforeseeable delays. Refer to Force
Majeure clause of our terms and conditions for details.
010518 c10032456a 6
Step
Contract signing
Site Survey
Complete engineering and permit drawings
Obtain emission permits
Generation equipment delivery
Installation and commissioning of NG system
Initiate
5/23/01
5/23/01
4/30/01
7/18/01
7/01/01
Complete
5/23/01
5/23/01
6/15/01
8/01/01.
7/18/01
8/01/01
010518 el 0032456a 7
Exhibit "B"
Rate Schedule
This project is being completed on a time-and-materials basis with a Guaranteed Maximum Price
(GMP), subject to the following rates, fees and markups:
Vice President, Onsite Power Generation
Senior Engineer/Project Manager
Purchasing/Logistics Support
Administrative
Travel and misc. expenses
Markup on subcontract labor
Markup on rental
Markup on equipment
Markup on freight
Markup on extended warranty
$135.00 per hour
$110.00 per hour
$75.00 per hour
$55.00 per hour
actual cost +20%
actual cost +20%
actual cost +20%
actual cost +20%
actual cost + 0%
actual cost + 0%
Note that markup calculation is based on specialized nature of the project and fast track schedule.
Guaranteed Maximum Price (includes margins as shown above)
Installation/Construction (subcontract)
Architectural/Engineering (subcontract)
(Electrical, Structural and Seismic)
Environmental Consulting
Project Management
$516,714
$106,325
$22,000
$55,500
(Includes 40 hrs. VP, 480 hours engrg., 10 hrs. P&L and 10 hrs admin)
Travel expenses
Miscellaneous and Freight
Contingency
Installation Subtotal
Generator Purchase (4 x 1350 kW NG Generators)
Sales Tax on Generator Purchase (8.0%)
Additional 4-year extended warranty
TOTAL
$12,000
$25,000
$60,000
$ 797,539
$3,240,000
$ 259,200
$ 216,000
$4,512,739
010518 cl 0032456b 1
progress Payment Schedule
CONTRACTOR may submit progress billings for SALES TAX paid and for INSTALLATION
SERVICES performed for payment within 30 days.
CONTRACTOR shall submit progress billings for GENERATOR EQUIPMENT in accordance
with the following deliverables schedule.
Contract Signed
Equipment Delivery and Complete Bill of Materials Verified
Mechanical and Electrical Acceptance Tests
All Building and Fire Permits Final
Emissions Source Test
As-built Drawings Submitted ¯
TOTAL
10%
30%
20%
10%
20%
10%
100%
$324,000
$972,O00
$648,OOO
$324,00O
$648,O0O
$324,000
$3,240,000
CONTRACTOR shall submit billing for EXTENDED WARRANTY after all acceptance tests
are completed.
Acceptance Tests
Progress payments shall be made in accordance with the payment schedule above, are tied to
¯ The acceptance tests cited in the table of progress payments for equipment are as follows:
Verify equipment Bill of Materials ("BOM"). A detailed list shall be submitted by
CONTRACTOR and finalized by mutual agreement between CONTRACTOR and the
Project Manager. The purpose of this test is to verify that everything was delivered that was
ordered.
Mechanical test. A detailed procedure shall be submitted by CONTRACTOR and finalized
by mutual agreement between CONTRACTOR and theProject Manager. The purpose of this
test is to verify the mechanical integrity of the engine, generator, fuel system and all other
mechanical components.
Electrical test. CONTRACTOR shall conduct the "COBUG Pre-Parallel Test Procedure"
provided by CPAU. The purpose of this test is to verify safe and reliable interconnection
operation of all relays, electrical synchronizing equipment, and fault response,
Emissions source test. The source test shall be conducted in accordance with provisions in
the "BAAQMD Authority to Construct". Emissions results must meet BAAQMD
requirements OR must meet or exceed manufacturer’s claims to be considered a pass. The
purpose of this test is to verify emissions estimates submitted in the project BAAQMD
application.
All tests shall be witnessed and signed by the Project Manager or by City personnel designated
by the Project Manager.
010518 el 0032456b 2
CERTIFICATION OF NONDISCRIMINATION
EXHIBIT "D"
Certification of Nondiscrimination:
As suppliers of goods or services t~ the City of Palo Alto, the firm and individuals listed below
certify that they do not discriminate in employment with regards to age, race, color, religion, sex,
national origin, ancestry, disability, or sexual preference; that they are in compliance with all
Federal, State, and local directives and executive orders regarding nondiscrimination in
employment.
THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW.
Firm:
Signature:
Name:
Signature:
Name:
Note:
(PRINT OR TYPE NAME)
(PRINT OR TYPE NAME)
Califomia Corporations Code Section 313 requires two corporate officers to execute
contracts.
*The signature of First Officer* must be one of the following: Chairman of the
Board; President; or Vice President.
**The signature of the Second Officer** must be one of the following: Secretary;
Assistant Secretary; Chief Financial Officer," or Assistant Treasurer.
(In the alternative, a certified corporate resolution attesting to the signatory
authority of the individuals signing in their respective capacities is acceptable)
CITY OF PALO ALTO PAGE 1 OF 1