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Home My WebLink AboutStaff Report 2312-2472CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, April 15, 2024 Council Chambers & Hybrid 5:30 PM Agenda Item 8.Approval of a Blanket Purchase Order With Eaton (Cooper Power Systems, LLC) for the Purchase of Pad Mounted Electric Equipment for the Utility’s Electric Distribution System Not to Exceed $750,000 per Year, for a Total Not-To-Exceed Amount of $5,250,000 for 7 Years; CEQA Status – Exempt Under CEQA Guidelines Section 15301 3 7 7 7 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Utilities Meeting Date: April 15, 2024 Staff Report: 2312-2472 TITLE Approval of a Blanket Purchase Order With Eaton (Cooper Power Systems, LLC) for the Purchase of Pad Mounted Electric Equipment for the Utility’s Electric Distribution System Not to Exceed $750,000 per Year, for a Total Not-To-Exceed Amount of $5,250,000 for 7 Years; CEQA Status – Exempt Under CEQA Guidelines Section 15301 RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or designee to execute a blanket purchase order with Eaton Cooper, not to Exceed $750,000 per year, for a total not- to-exceed amount of $5,250,000 for a period of 7 years. BACKGROUND Utilities purchases 15 kV oil insulated pad mounted switches for replacing old, failed switches and for all its on-going electric distribution projects, including Grid Modernization. The oil insulated pad mounted switches are an integral part of the electric distribution system. Reliability of electric distribution system depends on the quality of equipment and its durability. Utilities is responsible for maintenance and replacement of these switches as needed. Whenever a switch needs to be replaced, due to failure or changes being made to the distribution system, it is necessary to install a switch that has a similar footprint to reduce outage time and avoid costly modification to the existing substructures. Having a single manufacturer for the switches results in less training for personnel to maintain the equipment and reduces maintenance of spare inventory stock. There have been authorized blanket purchase orders with suppliers of Eaton Cooper for oil insulated pad mounted switches over 15 years. Solid dielectric switches are new and manufactured based on the latest technology available in the market. Though these switches are relatively expensive compared to oil insulated switches, they are more reliable and maintenance free, which will be beneficial in reducing outages and maintenance costs. Utilities staff is considering installing some of these switches at strategic locations as a pilot program. If found suitable, Utilities staff will move forward with replacing 3 7 7 7 all outdated switches with new solid dielectric switches. Utilities staff will require switches for capital improvement projects (CIP) as well as for upcoming electric grid modernization projects. As a result, staff is requesting authorization to set the purchase limit at $750,000 per fiscal year based on historical expenditures and future projects. ANALYSIS The Utilities Department electric division is upgrading its existing electric distribution system to support the Electric Grid Modernization project. This purchase order authorization would allow staff to procure an additional number of Oil Insulated Pad Mounted Switches and more modern Solid Dielectric Switches for Electric Grid Modernization and for on-going CIP projects. By authorizing the blanket order to Eaton Cooper (attached as Attachment C), the Utilities will be able to purchase both types of switches directly from Eaton Cooper, the original equipment manufacturer, and will save approximately $2,710,000 (combined for oil insulated and solid dielectric switches) during the 7-year period. Selecting and procuring switches from Eaton Cooper will ensure continued progress on Utilities’ capital improvement and electric grid modernization projects in a timely fashion. Based on the City’s consultant’s assessment, the City would need 10-15 switches per year for the next 7 years for scheduled grid modernization capital project. The grid modernization and on-going Capital Improvement projects require replacing the existing outdated switches that have exceeded their life spans and can fail without notice as well as adding additional capacity in the electric system requiring the installation of additional switches. The City will install new pad mounted switches at strategic locations as part of the electric grid modernization that will help the City optimize switching operations, reduce system outage time and improve reliability of the electric distribution system. Procurement Process The City Manager has approved a 10-year standardization for oil insulated pad mounted switches and solid dielectric switches under Palo Alto Municipal Code (PAMC) sections 2.30.360(e) and 2.30.900. It is the City’s practice for equipment standardization to be valid for a period of 10 years; prior to expiration, staff will review whether the standardization should be maintained or changing equipment will have added benefit. Utilities engineering staff have reviewed drawings from different providers that supply this type of equipment. After review, the equipment from these providers either do not meet required specifications for the Palo Alto system needs or cannot be installed on the existing pads without requiring modification to the existing substructure. Matching existing materials or equipment is required for proper and efficient operation of the electric distribution system. 3 7 7 7 The City Manager has approved an exemption from competitive solicitation for the purchase of this equipment, per PAMC 2.30.360(d), as the equipment is available through a single provider. Formal solicitations have been done in the past 10 years with Eaton Cooper being awarded the blanket orders. Utilities Engineering staff will present bi-annual cost comparisons and potential savings among different vendors to Council. FISCAL/RESOURCE IMPACT Funding for the first-year purchase of switches is available in the FY 2024 budget under EL- 24000 Electric Grid Modernization project. Staff compared pricing from distributor and manufacturer and found a cost savings of $802,000 and $1.91 Million over the span of 7 years, as shown in Attachments A and B. Funding for contract years two through seven are contingent upon Council appropriation and approval of funds through the annual budget process. The total value of this procurement over seven (7) years will not exceed $5,250,000. STAKEHOLDER ENGAGEMENT There was no need for stakeholder engagement since this is an internal process. ENVIRONMENTAL REVIEW Council action on this item is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines 15301 and 15302 of the California Code of Regulations because purchasing switches for grid maintenance, repair, and modernization involves the repair and maintenance of existing facilities. ATTACHMENTS Attachment A: Cost Comparison of Oil Switches Between Manufacturer and Distributor Attachment B: Cost Comparison of Solid Dielectric Switches Between Manufacturer and Distributor Attachment C: Blanket Purchase Order 4624000105 APPROVED BY: Dean Batchelor, Director of Utilities Staff: Mohammad Fattah, Electric Engineering Manager Cost Comparison (Eaton & Anixter) - Attachment "A"- March 21, 2024 Eaton Anixter Item #Pad Mounted Switch Configuration With & Without VFIs Unit Cost $ Unit Cost $Estimated Qty/Year Difference - $Est. Qty.Savings $% Savings 1 4-Way Switch with 4-600 Amps Switch & no VFI 50,220.00 58,395.00 3 8,175.00 3 24,525.00 16.28 2 4-Way Switch with 3-600 Amps Switch & 1-200 Amps VFI 63,542.00 73,886.00 1 10,344.00 1 10,344.00 16.28 4 4-Way Switch with 3-600 Amps Switch & 1-400 Amps VFI Not Quoted 73,943.00 1 -1 - - 5 4-Way Switch with 3-600 Amps Switch & 1-600 Amps VFI 63,591.00 73,943.00 1 10,352.00 1 10,352.00 16.28 6 4-Way Switch with 2-600 Amps Switch & 2-400 Amps VFIs Not Quoted 79,638.00 1 -1 - - 7 4-Way Switch with 2-600 Amps Switch & 2-200 Amps VFIs 67,697.00 78,717.00 4 11,020.00 4 44,080.00 16.28 8 4-Way Switch with 2-600 Amps Switch & 2-600 Amps VFIs 68,489.00 Not Quoted - - - 9 3-Way Switch with 3-600 Amps Switch & no VFI 44,141.00 51,326.00 1 7,185.00 1 7,185.00 16.28 10 3-Way Switch with 2-600 Amps Switch & 1-200 Amps VFI 55,847.00 64,938.00 1 9,091.00 1 9,091.00 16.28 11 3-Way Switch with 2-600 Amps Switch & 1-400 Amps VFI Not Quoted 64,996.00 1 -1 - - 12 3-Way Switch with 2-600 Amps Switch & 1-600 Amps VFI 55,897.00 64,996.00 1 9,099.00 1 9,099.00 16.28 Estimated Quantities/Year 15 Estimated Savings for 1 Year 114,676.00 Estimated Savings for 7 Years 802,732.00 Cost Comparison of Solid Dielectric Switches (Pad Mounted) - Attachment "B"- March 21, 2024 EATON/COOPER Item # Pad Mounted Switches (Above Ground):Estimated Qtys. EATON Anixter Unit Cost in $ Unit Cost in $Percentage Savings Total Savings/Year $ 1 4-Way Switch with 2-600 Amps switches & 2-400 Amps VFIs 1 101,350.00 123,597.00 21.95 22,247.00 2 4-Way Switch with 2-600 Amps switches & 2-200 Amps VFIs 4 101,350.00 123,597.00 21.95 88,988.00 3 4-Way Switch with 3-600 Amps switches & 1-400 Amps VFI 1 93,805.00 114,396.00 21.95 20,591.00 4 4-Way Switch with 3-600 Amps switches & 1-200 Amps VFI 1 93,085.00 114,396.00 22.89 21,311.00 5 4-Way Switch with 4-600 Amps switches & no VFI 3 86,830.00 105,890.00 21.95 57,180.00 6 3-Way Switch with 2-600 Amps switches & 1-200 VFI 1 77,655.00 94,701.00 21.95 17,046.00 7 3-Way Switch with 3-600 Amps switches & No VFI 2 70,110.00 85,500.00 21.95 30,780.00 8 2-Way Switch with 1-600 Amps switch & 1-200 Amps VFI 2 53,000.00 60,859.00 14.83 15,718.00 Total Estimated Switches/Year 15 273,861.00 Total Savings in 7 Years 1,917,027.00 Quote # 23551937 Valid from 3/11/2024 to 12/29/2024 See Staff Report 2312-2472 date April 15, 2024 0010 Purchase and delivery Pad Mntd Switches 750,000 USD 1.00 750,000.00 Purchase and delivery of 15KV, Oil insulated, Dead-front, Single-Sided,Pad Mounted Vaccum Switches with & without Vaccum Fault Interrupters (VFIs) as needed. This is the 1st year of an approved 7 year Standardization and Sole Source. Reference pricing as quoted for the 1st year of the contract below: Item 1:4-Way Switch w/ 4-600 Amps Switch & no VFI - $50,220 EA Item 2:4-Way Switch w/ 3-600 Amps Switch & 1-200 Amps VFI - $63,542 EA Item 3:4-Way Switch w/ 3-600 Amps Switch & 1-600 Amps VFI - $63,591 EA Item 4:4-Way Switch w/ 2-600 Amps Switch & 2-200 Amps VFIs - $67,697 EA Item 5:4-Way Switch w/ 2-600 Amps Switch & 2-600 Amps VFIs - $68,489 EA Item 6:3-Way Switch w/ 3-600 Amps Switch & no VFI - $44,141 EA Vendor Address COOPER POWER SYSTEMS 1319 E. LINCOLN AVE WAUKESHA WI 53186 Tel: 800-538-5025 Fax: 770-268-7006 Bill To: Utilities Engineering City of Palo Alto 1007 Elwell Court Palo Alto CA 94303 Ship To: Utilities Engineering City of Palo Alto 1007 Elwell Court Palo Alto CA 94303 Item Material/Description Quantity UM Unit Price Target $ Value ______________________________________ Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGESPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order.DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Tel:(650)329-2271 Fax:(650)329-2468 Blanket Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number 4624000105 Date 02/27/2024 Vendor No.100284 Payment Terms Payment Due 30 days FOB Point F.O.B Destination Ship via Vendor to ship bestway Term 02/27/2024 - 06/30/2024 Buyer/Phone Renee Howard / 650-496-5900 Email renee.howard@cityofpaloalto.org DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 1 of 3 Item 7:3-Way Switch w/ 2-600 Amps Switch & 1-200 Amps VFI - $55,847 EA Item 8:3-Way Switch w/ 2-600 Amps Switch & 1-600 Amps VFI - $55,897 EA Lead times 45 wks Price shall be adjusted by a percentage equal to the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco-Oakland- San Jose area, published by the United States Department of Labor Statistics (CPI) which is published most immediately preceding the commencement of the applicable Additional Term, which shall be compared with the CPI published most immediately preceding the commencement date of the then expiring term. Notwithstanding the foregoing, in no event shall CONTRACTOR#s compensation rates be increased by an amount exceeding five percent of the rates effective during the immediately preceding term. Any adjustment to CONTRACTOR#s compensation rates shall be reflected in a written amendment to this Agreement. NOT TO EXCEED ESTIMATED VALUE: $750,000.00 for the period April 15, 2024 through June 30, 2024 ALL INVOICES MUST REFERRENCE THE BLANKET ORDER NUMBER. PM: Gopal Jagannath x3138 gopal.jagannath@cityofpaloalto.org NOT TO EXCEED $750,000 Vendor Address COOPER POWER SYSTEMS 1319 E. LINCOLN AVE WAUKESHA WI 53186 Tel: 800-538-5025 Fax: 770-268-7006 Bill To: Utilities Engineering City of Palo Alto 1007 Elwell Court Palo Alto CA 94303 Ship To: Utilities Engineering City of Palo Alto 1007 Elwell Court Palo Alto CA 94303 Item Material/Description Quantity UM Unit Price Target $ Value ______________________________________ Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGESPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order.DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Tel:(650)329-2271 Fax:(650)329-2468 Blanket Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number 4624000105 Date 02/27/2024 Vendor No.100284 Payment Terms Payment Due 30 days FOB Point F.O.B Destination Ship via Vendor to ship bestway Term 02/27/2024 - 06/30/2024 Buyer/Phone Renee Howard / 650-496-5900 Email renee.howard@cityofpaloalto.org DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 2 of 3 ------------------------- Sub-Total 750,000.00 *** ORDERING VIA EMAIL *** **** PRICE HAS BEEN QUOTED **** Vendor Address COOPER POWER SYSTEMS 1319 E. LINCOLN AVE WAUKESHA WI 53186 Tel: 800-538-5025 Fax: 770-268-7006 Bill To: Utilities Engineering City of Palo Alto 1007 Elwell Court Palo Alto CA 94303 Ship To: Utilities Engineering City of Palo Alto 1007 Elwell Court Palo Alto CA 94303 Item Material/Description Quantity UM Unit Price Target $ Value ______________________________________ Chief Procurement Officer Total 750,000.00 THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGESPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order.DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Tel:(650)329-2271 Fax:(650)329-2468 Blanket Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number 4624000105 Date 02/27/2024 Vendor No.100284 Payment Terms Payment Due 30 days FOB Point F.O.B Destination Ship via Vendor to ship bestway Term 02/27/2024 - 06/30/2024 Buyer/Phone Renee Howard / 650-496-5900 Email renee.howard@cityofpaloalto.org DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 3 of 3