HomeMy WebLinkAboutStaff Report 2506-4906CITY OF PALO ALTO
CITY COUNCIL
Monday, November 03, 2025
Council Chambers & Hybrid
4:30 PM
Agenda Item
10.Approval and Authorization for the City Manager or Designee to Execute Purchase
Orders as Needed with the Okonite Company for Underground Cable for the Utility's
Electric Underground System in an Annual Amount of $800,000 for a Total Not-to-Exceed
Amount of $4,000,000 for a Period of Five (5) Years. CEQA Status: Not a Project.
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: November 3, 2025
Report #:2506-4906
TITLE
Approval and Authorization for the City Manager or Designee to Execute Purchase Orders as
Needed with the Okonite Company for Underground Cable for the Utility's Electric Underground
System in an Annual Amount of $800,000 for a Total Not-to-Exceed Amount of $4,000,000 for a
Period of Five (5) Years. CEQA Status: Not a Project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to
execute purchase orders as needed with the Okonite Company (Okonite) in an amount not-to-
exceed $800,000 annually in each of the next five years, for a total not-to-exceed amount of
$4,000,000 from January 1, 2026 through December 31, 2030 for new and replacement cable
within the City’s electric underground system.
BACKGROUND
Palo Alto’s electric distribution system is comprised of overhead wires and underground cable
throughout the City. These wires are necessary to provide power to residential and commercial
customers. For the underground portion, CPAU’s underground cable technical specification
covers the physical and electrical requirements for operation on the City’s medium voltage (4,000
and 12,000 Volts), 60 Hertz, 3-phase, and 3 or 4 wire systems. Cables used in CPAU operations
must meet this cable specifications and industry standards.
The City’s underground cable specification ensures a high-level performance and reliability. Over
the past 20 years, utility staff have installed Okonite underground cable without a cable failure.
Any exceptions to the underground cable specification by any cable manufacturer are always
reviewed, but Okonite is the only cable manufacturer that fully meets the City’s specification for
both cable insulation and a manufacturing process that ensures quality and reliability.
The equipment standardization with Okonite for medium voltage underground cable for the
utility’s electric underground system was approved pursuant to Section 2.30.900 of the Palo Alto
Municipal Code by the City Manager or their designee to ensure continued reliability, cost-
efficiency, and compatibility with existing electric infrastructure. Equipment standardization will
minimize material costs and spare parts while promoting efficient design, construction, and
maintenance practices.
As the City uses some of the same cable as PG&E, Okonite keeps stock on hand and can
meet the City’s short lead time delivery requirements. Okonite maintains a minimum
stock of the cables used by the City for emergency requests.
Okonite offers the City the ability to order reels cut to length for specific projects to
help manage inventory and reduce unusable cable segments.
Okonite’s factory (Santa Maria, CA) is located relatively close to Palo Alto and can
expedite delivery of cable if needed for emergencies.
Palo Alto takes advantage of the bulk pricing discounts achieved when using the same
cable as PG&E.
Standardizing existing equipment facilitates efficient construction and maintenance
practices by helping City employees to more consistently plan, design, identify, and work
with existing utility infrastructure.
By using a standard product CPAU staff can implement a consistent maintenance and
replacement program.
1). Cable shipments have never been missed and there have been no
quality issues associated with Okonite cable. In addition, Okonite has provided excellent
customer service to engineering and operations staff with training and technical support.
ANALYSIS
1 City Council, October 19, 2015; Staff Report 6131: https://www.paloalto.gov/files/assets/public/v/1/agendas-
minutes-reports/reports/city-manager-reports-cmrs/year-archive/2015/final-staff-report-id-6131_purchase-of-
medium-voltage-underground-cable-from-the-okonite-company-over-5-years.pdf
have standardized material and a supplier who has demonstrated the ability to ensure product
quality, uniformity of manufacture, ready availability, timely delivery, and can accommodation
CPAU requirements to maintain staff familiarity with the product and maintain electric system
reliability and resiliency.
Base Pricing & Purchase Order Authority: Okonite has provided the City with a base price for
CPAU’s four standard cable sizes for the first 12 months. For each consecutive year, adjustments
in metals may rise but cannot increase higher than the CPI-W index3. The price adjustments will
be applied to the current base price of copper at $2.00/lb and aluminum at $1.00/lb with a
maximum increase of 5% and minimum of 3%. Adjustments in metals may decrease and the
City would receive that pricing benefit. New or adjusted tariffs will impact the price per foot of
cable. Changes to Okonite’s material sourcing due to tariffs will be applied, up or down, and
passed through to the City. To date, Okonite has absorbed cost increases due to new tariffs by
limiting price increases to 1%. Future invoices will include a separately stated charge for any
tariff-impacted components.
FISCAL/RESOURCE IMPACT
3 Published by the United States Department of Labor, Bureau of Labor Statistics
The City’s purchase order template permits the City to terminate without cause or for
convenience by providing written notice to the contractor. In the event the City finds itself facing
a challenging budget situation, and it is determined that City resources need to be refocused
elsewhere, the City can terminate for convenience. Other options include amending the purchase
order to reduce the cost, for example, by reducing the quantity of items purchased.
STAKEHOLDER ENGAGEMENT
This agreement for materials does not directly impact customers that would require community
outreach.
ENVIRONMENTAL REVIEW
This purchase order authorization does not meet the definition of a project pursuant to Section
21065 of the California Public Resources Code and is otherwise categorically exempt from
California Environmental Quality Act (CEQA), under Section 15301 (repair or maintenance of
existing facilities), and Section 15302 (replacement or reconstruction of existing structures and
facilities) of the California Code of Regulations Title 14 (the “CEQA Guidelines”).
APPROVED BY:
Alan Kurotori, Director of Utilities